Correlation Between Ni Steel and DeviceENGCOLtd
Can any of the company-specific risk be diversified away by investing in both Ni Steel and DeviceENGCOLtd 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 Ni Steel and DeviceENGCOLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ni Steel and DeviceENGCOLtd, you can compare the effects of market volatilities on Ni Steel and DeviceENGCOLtd 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 Ni Steel with a short position of DeviceENGCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ni Steel and DeviceENGCOLtd.
Diversification Opportunities for Ni Steel and DeviceENGCOLtd
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 008260 and DeviceENGCOLtd is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ni Steel and DeviceENGCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeviceENGCOLtd and Ni 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 Ni Steel are associated (or correlated) with DeviceENGCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeviceENGCOLtd has no effect on the direction of Ni Steel i.e., Ni Steel and DeviceENGCOLtd go up and down completely randomly.
Pair Corralation between Ni Steel and DeviceENGCOLtd
Assuming the 90 days trading horizon Ni Steel is expected to under-perform the DeviceENGCOLtd. In addition to that, Ni Steel is 1.93 times more volatile than DeviceENGCOLtd. It trades about -0.08 of its total potential returns per unit of risk. DeviceENGCOLtd is currently generating about -0.12 per unit of volatility. If you would invest 1,315,000 in DeviceENGCOLtd on September 1, 2024 and sell it today you would lose (62,000) from holding DeviceENGCOLtd or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ni Steel vs. DeviceENGCOLtd
Performance |
| Timeline |
| Ni Steel |
| DeviceENGCOLtd |
Ni Steel and DeviceENGCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ni Steel and DeviceENGCOLtd
The main advantage of trading using opposite Ni Steel and DeviceENGCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ni Steel position performs unexpectedly, DeviceENGCOLtd 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 DeviceENGCOLtd will offset losses from the drop in DeviceENGCOLtd's long position.| Ni Steel vs. Seah Steel Corp | Ni Steel vs. Ajusteel Co | Ni Steel vs. Korea Steel Co | Ni Steel vs. Samwon Steel |
| DeviceENGCOLtd vs. Atinum Investment Co | DeviceENGCOLtd vs. Dongil Steel Co | DeviceENGCOLtd vs. Ni Steel | DeviceENGCOLtd vs. TS Investment Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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