Correlation Between Daishin Balance and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Hwangkum 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 Daishin Balance and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No8 and Hwangkum Steel Technology, you can compare the effects of market volatilities on Daishin Balance and Hwangkum 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 Daishin Balance with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Hwangkum Steel.
Diversification Opportunities for Daishin Balance and Hwangkum Steel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Hwangkum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology and Daishin Balance 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 Daishin Balance No8 are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of Daishin Balance i.e., Daishin Balance and Hwangkum Steel go up and down completely randomly.
Pair Corralation between Daishin Balance and Hwangkum Steel
Assuming the 90 days trading horizon Daishin Balance No8 is expected to generate 2.05 times more return on investment than Hwangkum Steel. However, Daishin Balance is 2.05 times more volatile than Hwangkum Steel Technology. It trades about 0.02 of its potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.03 per unit of risk. If you would invest 406,500 in Daishin Balance No8 on September 3, 2024 and sell it today you would earn a total of 15,000 from holding Daishin Balance No8 or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. Hwangkum Steel Technology
Performance |
| Timeline |
| Daishin Balance No8 |
| Hwangkum Steel Technology |
Daishin Balance and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Hwangkum Steel
The main advantage of trading using opposite Daishin Balance and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Hwangkum 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| Daishin Balance vs. Hwangkum Steel Technology | Daishin Balance vs. Duksan Hi Metal | Daishin Balance vs. Dongil Metal Co | Daishin Balance vs. Global Standard Technology |
| Hwangkum Steel vs. DB Insurance Co | Hwangkum Steel vs. Jeju Beer Co | Hwangkum Steel vs. Korean Reinsurance Co | Hwangkum Steel vs. Dongbu Insurance Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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