Correlation Between Innometry and Hankook Steel
Can any of the company-specific risk be diversified away by investing in both Innometry and Hankook 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 Innometry and Hankook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Hankook Steel Co, you can compare the effects of market volatilities on Innometry and Hankook 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 Innometry with a short position of Hankook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Hankook Steel.
Diversification Opportunities for Innometry and Hankook Steel
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Innometry and Hankook is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Hankook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Steel and Innometry 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 Innometry Co are associated (or correlated) with Hankook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Steel has no effect on the direction of Innometry i.e., Innometry and Hankook Steel go up and down completely randomly.
Pair Corralation between Innometry and Hankook Steel
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the Hankook Steel. But the stock apears to be less risky and, when comparing its historical volatility, Innometry Co is 2.82 times less risky than Hankook Steel. The stock trades about -0.21 of its potential returns per unit of risk. The Hankook Steel Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 198,000 in Hankook Steel Co on September 1, 2024 and sell it today you would earn a total of 17,500 from holding Hankook Steel Co or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. Hankook Steel Co
Performance |
| Timeline |
| Innometry |
| Hankook Steel |
Innometry and Hankook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Hankook Steel
The main advantage of trading using opposite Innometry and Hankook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Hankook 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 Hankook Steel will offset losses from the drop in Hankook Steel's long position.| Innometry vs. Chin Yang Chemical | Innometry vs. DB Financial Investment | Innometry vs. JC Chemical Co | Innometry vs. Kyung In Synthetic Corp |
| Hankook Steel vs. AptaBio Therapeutics | Hankook Steel vs. Daewoo SBI SPAC | Hankook Steel vs. Dream Security co | Hankook Steel vs. Microfriend |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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