Correlation Between Hironic and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Hironic and SeAH Besteel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hironic and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hironic Co and SeAH Besteel Corp, you can compare the effects of market volatilities on Hironic and SeAH Besteel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hironic with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hironic and SeAH Besteel.
Diversification Opportunities for Hironic and SeAH Besteel
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hironic and SeAH is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hironic Co and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Hironic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hironic Co are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Hironic i.e., Hironic and SeAH Besteel go up and down completely randomly.
Pair Corralation between Hironic and SeAH Besteel
Assuming the 90 days trading horizon Hironic Co is expected to generate 1.82 times more return on investment than SeAH Besteel. However, Hironic is 1.82 times more volatile than SeAH Besteel Corp. It trades about 0.11 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about -0.02 per unit of risk. If you would invest 630,000 in Hironic Co on October 25, 2024 and sell it today you would earn a total of 30,000 from holding Hironic Co or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hironic Co vs. SeAH Besteel Corp
Performance |
| Timeline |
| Hironic |
| SeAH Besteel Corp |
Hironic and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hironic and SeAH Besteel
The main advantage of trading using opposite Hironic and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hironic position performs unexpectedly, SeAH Besteel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Hironic vs. Medy Tox | Hironic vs. InBody CoLtd | Hironic vs. Soulbrain Holdings Co | Hironic vs. Busan Industrial Co |
| SeAH Besteel vs. KB Financial Group | SeAH Besteel vs. Shinhan Financial Group | SeAH Besteel vs. Hana Financial | SeAH Besteel vs. Woori Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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