Correlation Between Histeel and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Histeel and Duksan Hi 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 Histeel and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Histeel and Duksan Hi Metal, you can compare the effects of market volatilities on Histeel and Duksan Hi 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 Histeel with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Histeel and Duksan Hi.
Diversification Opportunities for Histeel and Duksan Hi
Very poor diversification
The 3 months correlation between Histeel and Duksan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Histeel and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal and Histeel 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 Histeel are associated (or correlated) with Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Histeel i.e., Histeel and Duksan Hi go up and down completely randomly.
Pair Corralation between Histeel and Duksan Hi
Assuming the 90 days trading horizon Histeel is expected to generate 1.23 times more return on investment than Duksan Hi. However, Histeel is 1.23 times more volatile than Duksan Hi Metal. It trades about 0.0 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.08 per unit of risk. If you would invest 329,500 in Histeel on September 25, 2024 and sell it today you would lose (45,000) from holding Histeel or give up 13.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Histeel vs. Duksan Hi Metal
Performance |
Timeline |
Histeel |
Duksan Hi Metal |
Histeel and Duksan Hi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Histeel and Duksan Hi
The main advantage of trading using opposite Histeel and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Histeel position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.Histeel vs. LG Chemicals | Histeel vs. POSCO Holdings | Histeel vs. Hanwha Solutions | Histeel vs. Lotte Chemical Corp |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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