Correlation Between Samhyun Steel and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on Samhyun Steel and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and DSC Investment.
Diversification Opportunities for Samhyun Steel and DSC Investment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samhyun and DSC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and DSC Investment go up and down completely randomly.
Pair Corralation between Samhyun Steel and DSC Investment
Assuming the 90 days trading horizon Samhyun Steel Co is expected to under-perform the DSC Investment. But the stock apears to be less risky and, when comparing its historical volatility, Samhyun Steel Co is 2.23 times less risky than DSC Investment. The stock trades about -0.02 of its potential returns per unit of risk. The DSC Investment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 343,000 in DSC Investment on September 12, 2024 and sell it today you would lose (64,000) from holding DSC Investment or give up 18.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhyun Steel Co vs. DSC Investment
Performance |
| Timeline |
| Samhyun Steel |
| DSC Investment |
Samhyun Steel and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhyun Steel and DSC Investment
The main advantage of trading using opposite Samhyun Steel and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. PJ Metal Co | Samhyun Steel vs. Gyeongnam Steel Co | Samhyun Steel vs. Jeil Steel Mfg |
| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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