Correlation Between OCI Co and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both OCI Co and Moonbae Steel 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 OCI Co and Moonbae Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OCI Co and Moonbae Steel, you can compare the effects of market volatilities on OCI Co and Moonbae Steel 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 OCI Co with a short position of Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCI Co and Moonbae Steel.
Diversification Opportunities for OCI Co and Moonbae Steel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between OCI and Moonbae is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding OCI Co and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel and OCI Co 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 OCI Co are associated (or correlated) with Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of OCI Co i.e., OCI Co and Moonbae Steel go up and down completely randomly.
Pair Corralation between OCI Co and Moonbae Steel
Assuming the 90 days trading horizon OCI Co is expected to under-perform the Moonbae Steel. In addition to that, OCI Co is 1.38 times more volatile than Moonbae Steel. It trades about -0.06 of its total potential returns per unit of risk. Moonbae Steel is currently generating about -0.06 per unit of volatility. If you would invest 339,453 in Moonbae Steel on September 12, 2024 and sell it today you would lose (116,453) from holding Moonbae Steel or give up 34.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
OCI Co vs. Moonbae Steel
Performance |
| Timeline |
| OCI Co |
| Moonbae Steel |
OCI Co and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OCI Co and Moonbae Steel
The main advantage of trading using opposite OCI Co and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCI Co position performs unexpectedly, Moonbae Steel 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| OCI Co vs. Grand Korea Leisure | OCI Co vs. Nable Communications | OCI Co vs. PLAYWITH | OCI Co vs. Kakao Games Corp |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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