Correlation Between Choil Aluminum and Settlebank
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Settlebank 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 Choil Aluminum and Settlebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Settlebank, you can compare the effects of market volatilities on Choil Aluminum and Settlebank 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 Choil Aluminum with a short position of Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Settlebank.
Diversification Opportunities for Choil Aluminum and Settlebank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Choil and Settlebank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Settlebank go up and down completely randomly.
Pair Corralation between Choil Aluminum and Settlebank
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 0.67 times more return on investment than Settlebank. However, Choil Aluminum is 1.49 times less risky than Settlebank. It trades about 0.15 of its potential returns per unit of risk. Settlebank is currently generating about -0.09 per unit of risk. If you would invest 145,200 in Choil Aluminum on October 17, 2024 and sell it today you would earn a total of 5,500 from holding Choil Aluminum or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Settlebank
Performance |
| Timeline |
| Choil Aluminum |
| Settlebank |
Choil Aluminum and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Settlebank
The main advantage of trading using opposite Choil Aluminum and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Choil Aluminum vs. Woori Financial Group | Choil Aluminum vs. Jb Financial | Choil Aluminum vs. Settlebank | Choil Aluminum vs. Incar Financial Service |
| Settlebank vs. Choil Aluminum | Settlebank vs. Heungkuk Metaltech CoLtd | Settlebank vs. Daiyang Metal Co | Settlebank vs. Korea Shipbuilding Offshore |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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