Correlation Between Dongil Steel and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Wonil Special 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 Dongil Steel and Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Steel Co and Wonil Special Steel, you can compare the effects of market volatilities on Dongil Steel and Wonil Special 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 Dongil Steel with a short position of Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Wonil Special.
Diversification Opportunities for Dongil Steel and Wonil Special
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongil and Wonil is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel and Dongil 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 Dongil Steel Co are associated (or correlated) with Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Dongil Steel i.e., Dongil Steel and Wonil Special go up and down completely randomly.
Pair Corralation between Dongil Steel and Wonil Special
Assuming the 90 days trading horizon Dongil Steel Co is expected to under-perform the Wonil Special. In addition to that, Dongil Steel is 1.01 times more volatile than Wonil Special Steel. It trades about -0.25 of its total potential returns per unit of risk. Wonil Special Steel is currently generating about 0.02 per unit of volatility. If you would invest 711,000 in Wonil Special Steel on August 29, 2024 and sell it today you would earn a total of 3,000 from holding Wonil Special Steel or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Wonil Special Steel
Performance |
| Timeline |
| Dongil Steel |
| Wonil Special Steel |
Dongil Steel and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Wonil Special
The main advantage of trading using opposite Dongil Steel and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Dongil Steel vs. Keum Kang Steel | Dongil Steel vs. Tplex Co | Dongil Steel vs. Samhyun Steel Co | Dongil Steel vs. Wonil Special Steel |
| Wonil Special vs. LG Chemicals | Wonil Special vs. Lotte Chemical Corp | Wonil Special vs. Hyundai Steel | Wonil Special vs. Seah Steel 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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