Correlation Between Bookook Steel and SH Energy
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and SH Energy 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 Bookook Steel and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and SH Energy Chemical, you can compare the effects of market volatilities on Bookook Steel and SH Energy 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 Bookook Steel with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and SH Energy.
Diversification Opportunities for Bookook Steel and SH Energy
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bookook and 002360 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and Bookook 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 Bookook Steel are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Bookook Steel i.e., Bookook Steel and SH Energy go up and down completely randomly.
Pair Corralation between Bookook Steel and SH Energy
Assuming the 90 days trading horizon Bookook Steel is expected to generate 1.12 times more return on investment than SH Energy. However, Bookook Steel is 1.12 times more volatile than SH Energy Chemical. It trades about -0.01 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.03 per unit of risk. If you would invest 358,500 in Bookook Steel on November 2, 2024 and sell it today you would lose (106,000) from holding Bookook Steel or give up 29.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bookook Steel vs. SH Energy Chemical
Performance |
| Timeline |
| Bookook Steel |
| SH Energy Chemical |
Bookook Steel and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and SH Energy
The main advantage of trading using opposite Bookook Steel and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Bookook Steel vs. WONIK Materials CoLtd | Bookook Steel vs. EV Advanced Material | Bookook Steel vs. Hana Materials | Bookook Steel vs. Daejoo Electronic Materials |
| SH Energy vs. Nable Communications | SH Energy vs. CU Medical Systems | SH Energy vs. ECSTELECOM Co | SH Energy vs. Green Cross Medical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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