Correlation Between Dongil Steel and Keum Kang
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Keum Kang 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 Keum Kang 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 Keum Kang Steel, you can compare the effects of market volatilities on Dongil Steel and Keum Kang 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 Keum Kang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Keum Kang.
Diversification Opportunities for Dongil Steel and Keum Kang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongil and Keum is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Keum Kang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keum Kang 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 Keum Kang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keum Kang Steel has no effect on the direction of Dongil Steel i.e., Dongil Steel and Keum Kang go up and down completely randomly.
Pair Corralation between Dongil Steel and Keum Kang
Assuming the 90 days trading horizon Dongil Steel Co is expected to generate 0.38 times more return on investment than Keum Kang. However, Dongil Steel Co is 2.61 times less risky than Keum Kang. It trades about -0.25 of its potential returns per unit of risk. Keum Kang Steel is currently generating about -0.12 per unit of risk. If you would invest 126,000 in Dongil Steel Co on August 29, 2024 and sell it today you would lose (8,500) from holding Dongil Steel Co or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Keum Kang Steel
Performance |
| Timeline |
| Dongil Steel |
| Keum Kang Steel |
Dongil Steel and Keum Kang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Keum Kang
The main advantage of trading using opposite Dongil Steel and Keum Kang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Keum Kang 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 Keum Kang will offset losses from the drop in Keum Kang's long position.| Dongil Steel vs. Keum Kang Steel | Dongil Steel vs. Tplex Co | Dongil Steel vs. PJ Metal Co | Dongil Steel vs. Samhyun Steel Co |
| Keum Kang vs. LG Chemicals | Keum Kang vs. Lotte Chemical Corp | Keum Kang vs. Hyundai Steel | Keum Kang 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |