Correlation Between SH Energy and Bookook Steel
Can any of the company-specific risk be diversified away by investing in both SH Energy and Bookook 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 SH Energy and Bookook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Bookook Steel, you can compare the effects of market volatilities on SH Energy and Bookook 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 SH Energy with a short position of Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Bookook Steel.
Diversification Opportunities for SH Energy and Bookook Steel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 002360 and Bookook is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook Steel and SH Energy 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 SH Energy Chemical are associated (or correlated) with Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of SH Energy i.e., SH Energy and Bookook Steel go up and down completely randomly.
Pair Corralation between SH Energy and Bookook Steel
Assuming the 90 days trading horizon SH Energy Chemical is expected to under-perform the Bookook Steel. But the stock apears to be less risky and, when comparing its historical volatility, SH Energy Chemical is 1.12 times less risky than Bookook Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Bookook Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 358,500 in Bookook Steel on November 2, 2024 and sell it today you would lose (106,000) from holding Bookook Steel or give up 29.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Bookook Steel
Performance |
| Timeline |
| SH Energy Chemical |
| Bookook Steel |
SH Energy and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Bookook Steel
The main advantage of trading using opposite SH Energy and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Bookook 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 Bookook Steel will offset losses from the drop in Bookook Steel's long position.| SH Energy vs. Nable Communications | SH Energy vs. CU Medical Systems | SH Energy vs. ECSTELECOM Co | SH Energy vs. Green Cross Medical |
| Bookook Steel vs. WONIK Materials CoLtd | Bookook Steel vs. EV Advanced Material | Bookook Steel vs. Hana Materials | Bookook Steel vs. Daejoo Electronic Materials |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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