Correlation Between DONGKUK TED and Hankuk Steel
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED 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 DONGKUK TED and Hankuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Hankuk Steel Wire, you can compare the effects of market volatilities on DONGKUK TED 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 DONGKUK TED with a short position of Hankuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Hankuk Steel.
Diversification Opportunities for DONGKUK TED and Hankuk Steel
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between DONGKUK and Hankuk is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL 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 DONGKUK TED 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 DONGKUK TED METAL 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 DONGKUK TED i.e., DONGKUK TED and Hankuk Steel go up and down completely randomly.
Pair Corralation between DONGKUK TED and Hankuk Steel
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 0.29 times more return on investment than Hankuk Steel. However, DONGKUK TED METAL is 3.45 times less risky than Hankuk Steel. It trades about 0.3 of its potential returns per unit of risk. Hankuk Steel Wire is currently generating about 0.03 per unit of risk. If you would invest 596,000 in DONGKUK TED METAL on November 1, 2024 and sell it today you would earn a total of 38,000 from holding DONGKUK TED METAL or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Hankuk Steel Wire
Performance |
| Timeline |
| DONGKUK TED METAL |
| Hankuk Steel Wire |
DONGKUK TED and Hankuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Hankuk Steel
The main advantage of trading using opposite DONGKUK TED and Hankuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED 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.| DONGKUK TED vs. Sempio Foods Co | DONGKUK TED vs. EV Advanced Material | DONGKUK TED vs. Hana Materials | DONGKUK TED vs. LAKE MATERIALS LTD |
| Hankuk Steel vs. Wireless Power Amplifier | Hankuk Steel vs. Heungkuk Metaltech CoLtd | Hankuk Steel vs. DONGKUK TED METAL | Hankuk Steel vs. Mobile Appliance |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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