Correlation Between Dongbu Steel and Coloray International
Can any of the company-specific risk be diversified away by investing in both Dongbu Steel and Coloray International 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 Coloray International 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 Coloray International Investment, you can compare the effects of market volatilities on Dongbu Steel and Coloray International 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 Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Steel and Coloray International.
Diversification Opportunities for Dongbu Steel and Coloray International
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbu and Coloray is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Steel Co and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International 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 Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Dongbu Steel i.e., Dongbu Steel and Coloray International go up and down completely randomly.
Pair Corralation between Dongbu Steel and Coloray International
Assuming the 90 days trading horizon Dongbu Steel Co is expected to generate 0.96 times more return on investment than Coloray International. However, Dongbu Steel Co is 1.04 times less risky than Coloray International. It trades about 0.0 of its potential returns per unit of risk. Coloray International Investment is currently generating about -0.17 per unit of risk. If you would invest 672,000 in Dongbu Steel Co on August 31, 2024 and sell it today you would lose (4,000) from holding Dongbu Steel Co or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Steel Co vs. Coloray International Investme
Performance |
| Timeline |
| Dongbu Steel |
| Coloray International |
Dongbu Steel and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Steel and Coloray International
The main advantage of trading using opposite Dongbu Steel and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Steel position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| Dongbu Steel vs. Samyoung Electronics Co | Dongbu Steel vs. Anam Electronics Co | Dongbu Steel vs. Jb Financial | Dongbu Steel vs. Daejoo Electronic Materials |
| Coloray International vs. LG Chem | Coloray International vs. Chunbo Co | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. Hyosung 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |