Correlation Between PH Tech and Histeel
Can any of the company-specific risk be diversified away by investing in both PH Tech and Histeel 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 PH Tech and Histeel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Histeel, you can compare the effects of market volatilities on PH Tech and Histeel 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 PH Tech with a short position of Histeel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Histeel.
Diversification Opportunities for PH Tech and Histeel
Very weak diversification
The 3 months correlation between 239890 and Histeel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Histeel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histeel and PH Tech 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 PH Tech Co are associated (or correlated) with Histeel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histeel has no effect on the direction of PH Tech i.e., PH Tech and Histeel go up and down completely randomly.
Pair Corralation between PH Tech and Histeel
Assuming the 90 days trading horizon PH Tech Co is expected to under-perform the Histeel. In addition to that, PH Tech is 1.11 times more volatile than Histeel. It trades about -0.17 of its total potential returns per unit of risk. Histeel is currently generating about -0.09 per unit of volatility. If you would invest 480,000 in Histeel on September 3, 2024 and sell it today you would lose (175,000) from holding Histeel or give up 36.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. Histeel
Performance |
| Timeline |
| PH Tech |
| Histeel |
PH Tech and Histeel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Histeel
The main advantage of trading using opposite PH Tech and Histeel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Histeel 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 Histeel will offset losses from the drop in Histeel's long position.| PH Tech vs. LG Chem | PH Tech vs. DukSan Neolux CoLtd | PH Tech vs. Hyosung Chemical Corp | PH Tech vs. LIG ES SPAC |
| Histeel vs. LG Chemicals | Histeel vs. POSCO Holdings | Histeel vs. Hanwha Solutions | Histeel vs. Lotte Chemical Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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