Correlation Between Moonbae Steel and Haisung TPC
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and Haisung TPC 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 Haisung TPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Haisung TPC Co, you can compare the effects of market volatilities on Moonbae Steel and Haisung TPC 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 Haisung TPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Haisung TPC.
Diversification Opportunities for Moonbae Steel and Haisung TPC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Moonbae and Haisung is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Haisung TPC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haisung TPC 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 Haisung TPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haisung TPC has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Haisung TPC go up and down completely randomly.
Pair Corralation between Moonbae Steel and Haisung TPC
Assuming the 90 days trading horizon Moonbae Steel is expected to under-perform the Haisung TPC. But the stock apears to be less risky and, when comparing its historical volatility, Moonbae Steel is 3.33 times less risky than Haisung TPC. The stock trades about -0.04 of its potential returns per unit of risk. The Haisung TPC Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 782,000 in Haisung TPC Co on September 2, 2024 and sell it today you would lose (270,000) from holding Haisung TPC Co or give up 34.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. Haisung TPC Co
Performance |
| Timeline |
| Moonbae Steel |
| Haisung TPC |
Moonbae Steel and Haisung TPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Haisung TPC
The main advantage of trading using opposite Moonbae Steel and Haisung TPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, Haisung TPC 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 Haisung TPC will offset losses from the drop in Haisung TPC's long position.| Moonbae Steel vs. Automobile Pc | Moonbae Steel vs. Asiana Airlines | Moonbae Steel vs. Youl Chon Chemical | Moonbae Steel vs. Dongnam Chemical 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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