Correlation Between Konan Technology and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both Konan Technology 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 Konan Technology and Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and Hwangkum Steel Technology, you can compare the effects of market volatilities on Konan Technology 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 Konan Technology with a short position of Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and Hwangkum Steel.
Diversification Opportunities for Konan Technology and Hwangkum Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Konan and Hwangkum is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology 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 Konan Technology 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 Konan Technology 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 Konan Technology i.e., Konan Technology and Hwangkum Steel go up and down completely randomly.
Pair Corralation between Konan Technology and Hwangkum Steel
Assuming the 90 days trading horizon Konan Technology is expected to under-perform the Hwangkum Steel. In addition to that, Konan Technology is 4.6 times more volatile than Hwangkum Steel Technology. It trades about -0.07 of its total potential returns per unit of risk. Hwangkum Steel Technology is currently generating about 0.22 per unit of volatility. If you would invest 494,500 in Hwangkum Steel Technology on November 29, 2024 and sell it today you would earn a total of 16,500 from holding Hwangkum Steel Technology or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konan Technology vs. Hwangkum Steel Technology
Performance |
| Timeline |
| Konan Technology |
| Hwangkum Steel Technology |
Konan Technology and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and Hwangkum Steel
The main advantage of trading using opposite Konan Technology and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology 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.| Konan Technology vs. Korea Industrial Co | Konan Technology vs. BGF Retail Co | Konan Technology vs. Jeju Beer Co | Konan Technology vs. Echomarketing CoLtd |
| Hwangkum Steel vs. Innowireless Co | Hwangkum Steel vs. Organic Special Pet | Hwangkum Steel vs. Nice Information Telecommunication | Hwangkum Steel vs. Lotte Data Communication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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