Correlation Between Hwangkum Steel and MegaStudy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel and MegaStudy 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 Hwangkum Steel and MegaStudy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwangkum Steel Technology and MegaStudy Co, you can compare the effects of market volatilities on Hwangkum Steel and MegaStudy 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 Hwangkum Steel with a short position of MegaStudy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and MegaStudy.

Diversification Opportunities for Hwangkum Steel and MegaStudy

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hwangkum and MegaStudy is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology and MegaStudy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MegaStudy and Hwangkum 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 Hwangkum Steel Technology are associated (or correlated) with MegaStudy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MegaStudy has no effect on the direction of Hwangkum Steel i.e., Hwangkum Steel and MegaStudy go up and down completely randomly.

Pair Corralation between Hwangkum Steel and MegaStudy

Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the MegaStudy. In addition to that, Hwangkum Steel is 2.63 times more volatile than MegaStudy Co. It trades about -0.07 of its total potential returns per unit of risk. MegaStudy Co is currently generating about 0.23 per unit of volatility. If you would invest  1,124,000  in MegaStudy Co on September 20, 2024 and sell it today you would earn a total of  36,000  from holding MegaStudy Co or generate 3.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hwangkum Steel Technology  vs.  MegaStudy Co

 Performance 
       Timeline  
Hwangkum Steel Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hwangkum Steel Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
MegaStudy 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MegaStudy Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MegaStudy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hwangkum Steel and MegaStudy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hwangkum Steel and MegaStudy

The main advantage of trading using opposite Hwangkum Steel and MegaStudy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel position performs unexpectedly, MegaStudy 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 MegaStudy will offset losses from the drop in MegaStudy's long position.
The idea behind Hwangkum Steel Technology and MegaStudy Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities