Correlation Between Moonbae Steel and Automobile
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and Automobile 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 Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Automobile Pc, you can compare the effects of market volatilities on Moonbae Steel and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Automobile.
Diversification Opportunities for Moonbae Steel and Automobile
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Moonbae and Automobile is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Automobile go up and down completely randomly.
Pair Corralation between Moonbae Steel and Automobile
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 0.52 times more return on investment than Automobile. However, Moonbae Steel is 1.91 times less risky than Automobile. It trades about -0.18 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.35 per unit of risk. If you would invest 234,000 in Moonbae Steel on November 9, 2024 and sell it today you would lose (9,500) from holding Moonbae Steel or give up 4.06% 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. Automobile Pc
Performance |
| Timeline |
| Moonbae Steel |
| Automobile Pc |
Moonbae Steel and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Automobile
The main advantage of trading using opposite Moonbae Steel and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Moonbae Steel vs. INNOX Advanced Materials | Moonbae Steel vs. RF Materials Co | Moonbae Steel vs. Hyundai Engineering Plastics | Moonbae Steel vs. Samsung Publishing Co |
| Automobile vs. Daiyang Metal Co | Automobile vs. Dongbang Transport Logistics | Automobile vs. System and Application | Automobile vs. Daishin Information Communications |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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