Correlation Between Husteel and DONGKUK STEEL
Can any of the company-specific risk be diversified away by investing in both Husteel and DONGKUK 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 Husteel and DONGKUK STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and DONGKUK STEEL MILL, you can compare the effects of market volatilities on Husteel and DONGKUK 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 Husteel with a short position of DONGKUK STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and DONGKUK STEEL.
Diversification Opportunities for Husteel and DONGKUK STEEL
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Husteel and DONGKUK is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and DONGKUK STEEL MILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK STEEL MILL and Husteel 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 Husteel are associated (or correlated) with DONGKUK STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK STEEL MILL has no effect on the direction of Husteel i.e., Husteel and DONGKUK STEEL go up and down completely randomly.
Pair Corralation between Husteel and DONGKUK STEEL
Assuming the 90 days trading horizon Husteel is expected to generate 0.89 times more return on investment than DONGKUK STEEL. However, Husteel is 1.12 times less risky than DONGKUK STEEL. It trades about 0.04 of its potential returns per unit of risk. DONGKUK STEEL MILL is currently generating about -0.06 per unit of risk. If you would invest 401,000 in Husteel on August 25, 2024 and sell it today you would earn a total of 4,500 from holding Husteel or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. DONGKUK STEEL MILL
Performance |
| Timeline |
| Husteel |
| DONGKUK STEEL MILL |
Husteel and DONGKUK STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and DONGKUK STEEL
The main advantage of trading using opposite Husteel and DONGKUK STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel position performs unexpectedly, DONGKUK 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 DONGKUK STEEL will offset losses from the drop in DONGKUK STEEL's long position.| Husteel vs. Korean Reinsurance Co | Husteel vs. Samsung Life Insurance | Husteel vs. Hansol Chemical Co | Husteel vs. Youl Chon Chemical |
| DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. LG Energy Solution | DONGKUK STEEL vs. SK Hynix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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