Correlation Between Samhyun Steel and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel and Daehan 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 Samhyun Steel and Daehan Steel 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 Daehan Steel, you can compare the effects of market volatilities on Samhyun Steel and Daehan 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 Samhyun Steel with a short position of Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and Daehan Steel.
Diversification Opportunities for Samhyun Steel and Daehan Steel
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samhyun and Daehan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel 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 Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and Daehan Steel go up and down completely randomly.
Pair Corralation between Samhyun Steel and Daehan Steel
Assuming the 90 days trading horizon Samhyun Steel is expected to generate 25.06 times less return on investment than Daehan Steel. But when comparing it to its historical volatility, Samhyun Steel Co is 2.55 times less risky than Daehan Steel. It trades about 0.03 of its potential returns per unit of risk. Daehan Steel is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,333,000 in Daehan Steel on September 1, 2024 and sell it today you would earn a total of 218,000 from holding Daehan Steel or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samhyun Steel Co vs. Daehan Steel
Performance |
| Timeline |
| Samhyun Steel |
| Daehan Steel |
Samhyun Steel and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhyun Steel and Daehan Steel
The main advantage of trading using opposite Samhyun Steel and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel position performs unexpectedly, Daehan 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 Daehan Steel will offset losses from the drop in Daehan Steel's long position.| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. Tplex Co | Samhyun Steel vs. Gyeongnam Steel Co | Samhyun Steel vs. Jeil Steel Mfg |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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