Correlation Between SV Investment and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both SV Investment and Hankuk Steel 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 SV Investment and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SV Investment and Hankuk Steel Wire, you can compare the effects of market volatilities on SV Investment and Hankuk Steel 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 SV Investment with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SV Investment and Hankuk Steel.
Diversification Opportunities for SV Investment and Hankuk Steel
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 289080 and Hankuk is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SV Investment and Hankuk Steel Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankuk Steel Wire and SV Investment 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 SV Investment are associated (or correlated) with Hankuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankuk Steel Wire has no effect on the direction of SV Investment i.e., SV Investment and Hankuk Steel go up and down completely randomly.
Pair Corralation between SV Investment and Hankuk Steel
Assuming the 90 days trading horizon SV Investment is expected to under-perform the Hankuk Steel. In addition to that, SV Investment is 1.46 times more volatile than Hankuk Steel Wire. It trades about -0.03 of its total potential returns per unit of risk. Hankuk Steel Wire is currently generating about 0.0 per unit of volatility. If you would invest 393,354 in Hankuk Steel Wire on September 12, 2024 and sell it today you would lose (13,354) from holding Hankuk Steel Wire or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SV Investment vs. Hankuk Steel Wire
Performance |
| Timeline |
| SV Investment |
| Hankuk Steel Wire |
SV Investment and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SV Investment and Hankuk Steel
The main advantage of trading using opposite SV Investment and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SV Investment position performs unexpectedly, Hankuk Steel 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 Hankuk Steel will offset losses from the drop in Hankuk Steel's long position.| SV Investment vs. Daou Data Corp | SV Investment vs. Aju IB Investment | SV Investment vs. EBEST Investment Securities | SV Investment vs. Atinum Investment Co |
| Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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