Correlation Between Daelim Trading and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Korea 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 Daelim Trading and Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Korea Steel Co, you can compare the effects of market volatilities on Daelim Trading and Korea 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 Daelim Trading with a short position of Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Korea Steel.
Diversification Opportunities for Daelim Trading and Korea Steel
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daelim and Korea is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Daelim Trading i.e., Daelim Trading and Korea Steel go up and down completely randomly.
Pair Corralation between Daelim Trading and Korea Steel
Assuming the 90 days trading horizon Daelim Trading Co is expected to generate 1.14 times more return on investment than Korea Steel. However, Daelim Trading is 1.14 times more volatile than Korea Steel Co. It trades about -0.01 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.1 per unit of risk. If you would invest 260,500 in Daelim Trading Co on October 29, 2024 and sell it today you would lose (1,000.00) from holding Daelim Trading Co or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Korea Steel Co
Performance |
| Timeline |
| Daelim Trading |
| Korea Steel |
Daelim Trading and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Korea Steel
The main advantage of trading using opposite Daelim Trading and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Korea 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Daelim Trading vs. Hyundai Home Shopping | Daelim Trading vs. KEPCO Engineering Construction | Daelim Trading vs. Seoam Machinery Industry | Daelim Trading vs. DB Insurance Co |
| Korea Steel vs. Finebesteel | Korea Steel vs. Seah Steel Corp | Korea Steel vs. Dongil Metal Co | Korea Steel vs. Daechang Steel Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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