Correlation Between Moonbae Steel and OCI Co
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and OCI Co 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 OCI Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and OCI Co, you can compare the effects of market volatilities on Moonbae Steel and OCI Co 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 OCI Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and OCI Co.
Diversification Opportunities for Moonbae Steel and OCI Co
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Moonbae and OCI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co 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 OCI Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and OCI Co go up and down completely randomly.
Pair Corralation between Moonbae Steel and OCI Co
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 12.0 times less return on investment than OCI Co. In addition to that, Moonbae Steel is 1.33 times more volatile than OCI Co. It trades about 0.0 of its total potential returns per unit of risk. OCI Co is currently generating about 0.0 per unit of volatility. If you would invest 6,020,000 in OCI Co on September 12, 2024 and sell it today you would lose (40,000) from holding OCI Co or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Moonbae Steel vs. OCI Co
Performance |
| Timeline |
| Moonbae Steel |
| OCI Co |
Moonbae Steel and OCI Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and OCI Co
The main advantage of trading using opposite Moonbae Steel and OCI Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, OCI Co 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 OCI Co will offset losses from the drop in OCI Co's long position.| Moonbae Steel vs. LG Chemicals | Moonbae Steel vs. POSCO Holdings | Moonbae Steel vs. Hanwha Solutions | Moonbae Steel vs. Lotte Chemical Corp |
| OCI Co vs. Grand Korea Leisure | OCI Co vs. Nable Communications | OCI Co vs. PLAYWITH | OCI Co vs. Kakao Games 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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