Correlation Between Digital Power and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both Digital Power and Samhyun Steel 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 Digital Power and Samhyun Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Samhyun Steel Co, you can compare the effects of market volatilities on Digital Power and Samhyun Steel 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 Digital Power with a short position of Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Samhyun Steel.
Diversification Opportunities for Digital Power and Samhyun Steel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and Samhyun is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel and Digital Power 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 Digital Power Communications are associated (or correlated) with Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of Digital Power i.e., Digital Power and Samhyun Steel go up and down completely randomly.
Pair Corralation between Digital Power and Samhyun Steel
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 1.64 times more return on investment than Samhyun Steel. However, Digital Power is 1.64 times more volatile than Samhyun Steel Co. It trades about 0.02 of its potential returns per unit of risk. Samhyun Steel Co is currently generating about -0.01 per unit of risk. If you would invest 796,000 in Digital Power Communications on August 29, 2024 and sell it today you would earn a total of 4,000 from holding Digital Power Communications or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Samhyun Steel Co
Performance |
| Timeline |
| Digital Power Commun |
| Samhyun Steel |
Digital Power and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Samhyun Steel
The main advantage of trading using opposite Digital Power and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Samhyun Steel 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.| Digital Power vs. National Plastic Co | Digital Power vs. LS Materials | Digital Power vs. Automobile Pc | Digital Power vs. Alton Sports CoLtd |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |