Correlation Between Moonbae Steel and Samlip General
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and Samlip General 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 Moonbae Steel and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Samlip General Foods, you can compare the effects of market volatilities on Moonbae Steel and Samlip General 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 Moonbae Steel with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Samlip General.
Diversification Opportunities for Moonbae Steel and Samlip General
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Moonbae and Samlip is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and Moonbae 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 Moonbae Steel are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Samlip General go up and down completely randomly.
Pair Corralation between Moonbae Steel and Samlip General
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 1.37 times more return on investment than Samlip General. However, Moonbae Steel is 1.37 times more volatile than Samlip General Foods. It trades about -0.02 of its potential returns per unit of risk. Samlip General Foods is currently generating about -0.05 per unit of risk. If you would invest 333,932 in Moonbae Steel on September 2, 2024 and sell it today you would lose (79,432) from holding Moonbae Steel or give up 23.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. Samlip General Foods
Performance |
| Timeline |
| Moonbae Steel |
| Samlip General Foods |
Moonbae Steel and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Samlip General
The main advantage of trading using opposite Moonbae Steel and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Moonbae Steel vs. Dongil Metal Co | Moonbae Steel vs. CU Tech Corp | Moonbae Steel vs. Eagle Veterinary Technology | Moonbae Steel vs. FNSTech Co |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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