Correlation Between Samhyun Steel and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel and DIGITAL CHOSUN 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 Samhyun Steel and DIGITAL CHOSUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhyun Steel Co and DIGITAL CHOSUN, you can compare the effects of market volatilities on Samhyun Steel and DIGITAL CHOSUN 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 Samhyun Steel with a short position of DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and DIGITAL CHOSUN.
Diversification Opportunities for Samhyun Steel and DIGITAL CHOSUN
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samhyun and DIGITAL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN and Samhyun 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 Samhyun Steel Co are associated (or correlated) with DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Samhyun Steel and DIGITAL CHOSUN
Assuming the 90 days trading horizon Samhyun Steel Co is expected to generate 0.53 times more return on investment than DIGITAL CHOSUN. However, Samhyun Steel Co is 1.9 times less risky than DIGITAL CHOSUN. It trades about 0.05 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.01 per unit of risk. If you would invest 466,000 in Samhyun Steel Co on September 23, 2024 and sell it today you would earn a total of 7,000 from holding Samhyun Steel Co or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhyun Steel Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Samhyun Steel |
| DIGITAL CHOSUN |
Samhyun Steel and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhyun Steel and DIGITAL CHOSUN
The main advantage of trading using opposite Samhyun Steel and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. Tplex Co | Samhyun Steel vs. PJ Metal Co | Samhyun Steel vs. Gyeongnam Steel Co |
| DIGITAL CHOSUN vs. Samhyun Steel Co | DIGITAL CHOSUN vs. Finebesteel | DIGITAL CHOSUN vs. BooKook Steel Co | DIGITAL CHOSUN vs. Iljin Materials Co |
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.
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