Correlation Between Moonbae Steel and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and BIT Computer 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 BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and BIT Computer Co, you can compare the effects of market volatilities on Moonbae Steel and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and BIT Computer.
Diversification Opportunities for Moonbae Steel and BIT Computer
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Moonbae and BIT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and BIT Computer go up and down completely randomly.
Pair Corralation between Moonbae Steel and BIT Computer
Assuming the 90 days trading horizon Moonbae Steel is expected to under-perform the BIT Computer. But the stock apears to be less risky and, when comparing its historical volatility, Moonbae Steel is 1.58 times less risky than BIT Computer. The stock trades about -0.03 of its potential returns per unit of risk. The BIT Computer Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 670,109 in BIT Computer Co on October 14, 2024 and sell it today you would lose (163,109) from holding BIT Computer Co or give up 24.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. BIT Computer Co
Performance |
| Timeline |
| Moonbae Steel |
| BIT Computer |
Moonbae Steel and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and BIT Computer
The main advantage of trading using opposite Moonbae Steel and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Moonbae Steel vs. MediaZen | Moonbae Steel vs. Digital Multimedia Technology | Moonbae Steel vs. Hironic Co | Moonbae Steel vs. Finebesteel |
| BIT Computer vs. Anam Electronics Co | BIT Computer vs. J Steel Co | BIT Computer vs. Shin Steel Co | BIT Computer vs. Moonbae Steel |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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