Correlation Between Dongil Steel and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Fine Besteel 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 Fine Besteel 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 Fine Besteel Co, you can compare the effects of market volatilities on Dongil Steel and Fine Besteel 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 Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Fine Besteel.
Diversification Opportunities for Dongil Steel and Fine Besteel
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongil and Fine is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel 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 Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of Dongil Steel i.e., Dongil Steel and Fine Besteel go up and down completely randomly.
Pair Corralation between Dongil Steel and Fine Besteel
Assuming the 90 days trading horizon Dongil Steel Co is expected to under-perform the Fine Besteel. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Steel Co is 3.83 times less risky than Fine Besteel. The stock trades about -0.25 of its potential returns per unit of risk. The Fine Besteel Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 84,000 in Fine Besteel Co on August 29, 2024 and sell it today you would earn a total of 28,200 from holding Fine Besteel Co or generate 33.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Fine Besteel Co
Performance |
| Timeline |
| Dongil Steel |
| Fine Besteel |
Dongil Steel and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Fine Besteel
The main advantage of trading using opposite Dongil Steel and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Fine Besteel 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 Fine Besteel will offset losses from the drop in Fine Besteel'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 |
| Fine Besteel vs. Raontech | Fine Besteel vs. Yura Tech Co | Fine Besteel vs. FNSTech Co | Fine Besteel vs. CU Tech 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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