Correlation Between Dongil Steel and MPLUS Corp
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and MPLUS Corp 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 MPLUS Corp 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 mPLUS Corp, you can compare the effects of market volatilities on Dongil Steel and MPLUS Corp 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 MPLUS Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and MPLUS Corp.
Diversification Opportunities for Dongil Steel and MPLUS Corp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongil and MPLUS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and mPLUS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mPLUS Corp 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 MPLUS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mPLUS Corp has no effect on the direction of Dongil Steel i.e., Dongil Steel and MPLUS Corp go up and down completely randomly.
Pair Corralation between Dongil Steel and MPLUS Corp
Assuming the 90 days trading horizon Dongil Steel Co is expected to generate 0.5 times more return on investment than MPLUS Corp. However, Dongil Steel Co is 1.99 times less risky than MPLUS Corp. It trades about -0.17 of its potential returns per unit of risk. mPLUS Corp is currently generating about -0.41 per unit of risk. If you would invest 124,500 in Dongil Steel Co on September 1, 2024 and sell it today you would lose (5,800) from holding Dongil Steel Co or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dongil Steel Co vs. mPLUS Corp
Performance |
| Timeline |
| Dongil Steel |
| mPLUS Corp |
Dongil Steel and MPLUS Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and MPLUS Corp
The main advantage of trading using opposite Dongil Steel and MPLUS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, MPLUS Corp 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 MPLUS Corp will offset losses from the drop in MPLUS Corp's long position.| Dongil Steel vs. Keum Kang Steel | Dongil Steel vs. Tplex Co | Dongil Steel vs. Gyeongnam Steel Co | Dongil Steel vs. Jeil Steel Mfg |
| MPLUS Corp vs. Dongil Steel Co | MPLUS Corp vs. Kbi Metal Co | MPLUS Corp vs. Shinhan Inverse Silver | MPLUS Corp vs. Ni Steel |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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