Correlation Between Dongbu Steel and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Dongbu Steel and Daebo Magnetic 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 Dongbu Steel and Daebo Magnetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbu Steel Co and Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Dongbu Steel and Daebo Magnetic 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 Dongbu Steel with a short position of Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Steel and Daebo Magnetic.
Diversification Opportunities for Dongbu Steel and Daebo Magnetic
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbu and Daebo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Steel Co and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd and Dongbu 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 Dongbu Steel Co are associated (or correlated) with Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Dongbu Steel i.e., Dongbu Steel and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Dongbu Steel and Daebo Magnetic
Assuming the 90 days trading horizon Dongbu Steel Co is expected to generate 0.63 times more return on investment than Daebo Magnetic. However, Dongbu Steel Co is 1.58 times less risky than Daebo Magnetic. It trades about -0.05 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.09 per unit of risk. If you would invest 793,875 in Dongbu Steel Co on September 14, 2024 and sell it today you would lose (220,875) from holding Dongbu Steel Co or give up 27.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Dongbu Steel Co vs. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Dongbu Steel |
| Daebo Magnetic CoLtd |
Dongbu Steel and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Steel and Daebo Magnetic
The main advantage of trading using opposite Dongbu Steel and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Steel position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Dongbu Steel vs. LG Chemicals | Dongbu Steel vs. POSCO Holdings | Dongbu Steel vs. Hanwha Solutions | Dongbu Steel vs. Lotte Chemical Corp |
| Daebo Magnetic vs. Moonbae Steel | Daebo Magnetic vs. Dongbu Steel Co | Daebo Magnetic vs. Foodnamoo | Daebo Magnetic vs. Dong A Steel Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |