Correlation Between Hankuk Steel and TJ Media
Can any of the company-specific risk be diversified away by investing in both Hankuk Steel and TJ Media 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 Hankuk Steel and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankuk Steel Wire and TJ media Co, you can compare the effects of market volatilities on Hankuk Steel and TJ Media 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 Hankuk Steel with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankuk Steel and TJ Media.
Diversification Opportunities for Hankuk Steel and TJ Media
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hankuk and 032540 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hankuk Steel Wire and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Hankuk Steel 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 Hankuk Steel Wire are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Hankuk Steel i.e., Hankuk Steel and TJ Media go up and down completely randomly.
Pair Corralation between Hankuk Steel and TJ Media
Assuming the 90 days trading horizon Hankuk Steel Wire is expected to generate 3.69 times more return on investment than TJ Media. However, Hankuk Steel is 3.69 times more volatile than TJ media Co. It trades about 0.15 of its potential returns per unit of risk. TJ media Co is currently generating about -0.19 per unit of risk. If you would invest 302,500 in Hankuk Steel Wire on September 25, 2024 and sell it today you would earn a total of 118,500 from holding Hankuk Steel Wire or generate 39.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hankuk Steel Wire vs. TJ media Co
Performance |
Timeline |
Hankuk Steel Wire |
TJ media |
Hankuk Steel and TJ Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hankuk Steel and TJ Media
The main advantage of trading using opposite Hankuk Steel and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankuk Steel position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.Hankuk Steel vs. LG Chemicals | Hankuk Steel vs. POSCO Holdings | Hankuk Steel vs. Hanwha Solutions | Hankuk Steel vs. Lotte Chemical Corp |
TJ Media vs. Lion Chemtech Co | TJ Media vs. Samhyun Steel Co | TJ Media vs. KMH Hitech Co | TJ Media vs. Hankuk Steel Wire |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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