Correlation Between Kuk Young and Dong-A Steel
Can any of the company-specific risk be diversified away by investing in both Kuk Young and Dong-A 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 Kuk Young and Dong-A Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuk Young GM and Dong A Steel Technology, you can compare the effects of market volatilities on Kuk Young and Dong-A 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 Kuk Young with a short position of Dong-A Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuk Young and Dong-A Steel.
Diversification Opportunities for Kuk Young and Dong-A Steel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kuk and Dong-A is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kuk Young GM and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel and Kuk Young 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 Kuk Young GM are associated (or correlated) with Dong-A Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Kuk Young i.e., Kuk Young and Dong-A Steel go up and down completely randomly.
Pair Corralation between Kuk Young and Dong-A Steel
Assuming the 90 days trading horizon Kuk Young GM is expected to generate 1.32 times more return on investment than Dong-A Steel. However, Kuk Young is 1.32 times more volatile than Dong A Steel Technology. It trades about 0.04 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about -0.04 per unit of risk. If you would invest 146,600 in Kuk Young GM on September 12, 2024 and sell it today you would earn a total of 38,500 from holding Kuk Young GM or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuk Young GM vs. Dong A Steel Technology
Performance |
| Timeline |
| Kuk Young GM |
| Dong A Steel |
Kuk Young and Dong-A Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuk Young and Dong-A Steel
The main advantage of trading using opposite Kuk Young and Dong-A Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuk Young position performs unexpectedly, Dong-A 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 Dong-A Steel will offset losses from the drop in Dong-A Steel's long position.| Kuk Young vs. Golden Bridge Investment | Kuk Young vs. Coloray International Investment | Kuk Young vs. Atinum Investment Co | Kuk Young vs. Korea Information Communications |
| Dong-A Steel vs. Samsung Electronics Co | Dong-A Steel vs. Samsung Electronics Co | Dong-A Steel vs. SK Hynix | Dong-A Steel vs. POSCO Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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