Correlation Between Bookook Steel and Korea Refract
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Korea Refract 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 Korea Refract into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and Korea Refract, you can compare the effects of market volatilities on Bookook Steel and Korea Refract 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 Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Korea Refract.
Diversification Opportunities for Bookook Steel and Korea Refract
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bookook and Korea is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract 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 Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of Bookook Steel i.e., Bookook Steel and Korea Refract go up and down completely randomly.
Pair Corralation between Bookook Steel and Korea Refract
Assuming the 90 days trading horizon Bookook Steel is expected to under-perform the Korea Refract. In addition to that, Bookook Steel is 1.32 times more volatile than Korea Refract. It trades about -0.14 of its total potential returns per unit of risk. Korea Refract is currently generating about -0.09 per unit of volatility. If you would invest 296,500 in Korea Refract on September 3, 2024 and sell it today you would lose (87,500) from holding Korea Refract or give up 29.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bookook Steel vs. Korea Refract
Performance |
| Timeline |
| Bookook Steel |
| Korea Refract |
Bookook Steel and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and Korea Refract
The main advantage of trading using opposite Bookook Steel and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, Korea Refract 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 Korea Refract will offset losses from the drop in Korea Refract's long position.| Bookook Steel vs. Seah Steel Corp | Bookook Steel vs. Ni Steel | Bookook Steel vs. Korea Steel Co | Bookook Steel vs. Finebesteel |
| Korea Refract vs. Dongbang Transport Logistics | Korea Refract vs. Samwha Electronics Co | Korea Refract vs. Anam Electronics Co | Korea Refract vs. Sungdo Engineering Construction |
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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