Correlation Between Shin Steel and HMM
Can any of the company-specific risk be diversified away by investing in both Shin Steel and HMM 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 Shin Steel and HMM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Steel Co and HMM Co, you can compare the effects of market volatilities on Shin Steel and HMM 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 Shin Steel with a short position of HMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Steel and HMM.
Diversification Opportunities for Shin Steel and HMM
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and HMM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co and HMM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMM Co and Shin Steel 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 Shin Steel Co are associated (or correlated) with HMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMM Co has no effect on the direction of Shin Steel i.e., Shin Steel and HMM go up and down completely randomly.
Pair Corralation between Shin Steel and HMM
Assuming the 90 days trading horizon Shin Steel Co is expected to generate 1.64 times more return on investment than HMM. However, Shin Steel is 1.64 times more volatile than HMM Co. It trades about 0.32 of its potential returns per unit of risk. HMM Co is currently generating about 0.19 per unit of risk. If you would invest 206,000 in Shin Steel Co on October 10, 2024 and sell it today you would earn a total of 41,000 from holding Shin Steel Co or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Steel Co vs. HMM Co
Performance |
| Timeline |
| Shin Steel |
| HMM Co |
Shin Steel and HMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Steel and HMM
The main advantage of trading using opposite Shin Steel and HMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel position performs unexpectedly, HMM 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 HMM will offset losses from the drop in HMM's long position.| Shin Steel vs. Echomarketing CoLtd | Shin Steel vs. Phoenix Materials Co | Shin Steel vs. LAKE MATERIALS LTD | Shin Steel vs. Seoyon Topmetal Co |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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