Correlation Between Moonbae Steel and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and Camus Engineering 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 Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Camus Engineering Construction, you can compare the effects of market volatilities on Moonbae Steel and Camus Engineering 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 Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Camus Engineering.
Diversification Opportunities for Moonbae Steel and Camus Engineering
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Moonbae and Camus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering 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 Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Camus Engineering go up and down completely randomly.
Pair Corralation between Moonbae Steel and Camus Engineering
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 1.11 times more return on investment than Camus Engineering. However, Moonbae Steel is 1.11 times more volatile than Camus Engineering Construction. It trades about -0.05 of its potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.07 per unit of risk. If you would invest 310,920 in Moonbae Steel on September 4, 2024 and sell it today you would lose (67,920) from holding Moonbae Steel or give up 21.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. Camus Engineering Construction
Performance |
| Timeline |
| Moonbae Steel |
| Camus Engineering |
Moonbae Steel and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Camus Engineering
The main advantage of trading using opposite Moonbae Steel and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Moonbae Steel vs. LG Chemicals | Moonbae Steel vs. POSCO Holdings | Moonbae Steel vs. Hanwha Solutions | Moonbae Steel vs. Lotte Chemical 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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