Correlation Between Korea Steel and IQuest
Can any of the company-specific risk be diversified away by investing in both Korea Steel and IQuest 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 Korea Steel and IQuest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Steel Co and IQuest Co, you can compare the effects of market volatilities on Korea Steel and IQuest 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 Korea Steel with a short position of IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Steel and IQuest.
Diversification Opportunities for Korea Steel and IQuest
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and IQuest is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korea Steel Co and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest and Korea 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 Korea Steel Co are associated (or correlated) with IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Korea Steel i.e., Korea Steel and IQuest go up and down completely randomly.
Pair Corralation between Korea Steel and IQuest
Assuming the 90 days trading horizon Korea Steel Co is expected to under-perform the IQuest. But the stock apears to be less risky and, when comparing its historical volatility, Korea Steel Co is 2.39 times less risky than IQuest. The stock trades about -0.08 of its potential returns per unit of risk. The IQuest Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 271,063 in IQuest Co on September 3, 2024 and sell it today you would lose (34,063) from holding IQuest Co or give up 12.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Steel Co vs. IQuest Co
Performance |
| Timeline |
| Korea Steel |
| IQuest |
Korea Steel and IQuest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Steel and IQuest
The main advantage of trading using opposite Korea Steel and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Steel position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest's long position.| Korea Steel vs. Top Material Co | Korea Steel vs. PI Advanced Materials | Korea Steel vs. Hanjin Transportation Co | Korea Steel vs. Hanmi Semiconductor Co |
| IQuest vs. Semyung Electric Machinery | IQuest vs. GS Engineering Construction | IQuest vs. AurosTechnology | IQuest vs. Puloon Technology |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |