Correlation Between Bookook Steel and Kwang Jin
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Kwang Jin 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 Kwang Jin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and Kwang Jin Ind, you can compare the effects of market volatilities on Bookook Steel and Kwang Jin 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 Kwang Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Kwang Jin.
Diversification Opportunities for Bookook Steel and Kwang Jin
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bookook and Kwang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Kwang Jin Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwang Jin Ind 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 Kwang Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwang Jin Ind has no effect on the direction of Bookook Steel i.e., Bookook Steel and Kwang Jin go up and down completely randomly.
Pair Corralation between Bookook Steel and Kwang Jin
Assuming the 90 days trading horizon Bookook Steel is expected to generate 1.03 times more return on investment than Kwang Jin. However, Bookook Steel is 1.03 times more volatile than Kwang Jin Ind. It trades about -0.03 of its potential returns per unit of risk. Kwang Jin Ind is currently generating about -0.12 per unit of risk. If you would invest 263,000 in Bookook Steel on September 26, 2024 and sell it today you would lose (11,000) from holding Bookook Steel or give up 4.18% 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. Kwang Jin Ind
Performance |
| Timeline |
| Bookook Steel |
| Kwang Jin Ind |
Bookook Steel and Kwang Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and Kwang Jin
The main advantage of trading using opposite Bookook Steel and Kwang Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, Kwang Jin 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 Kwang Jin will offset losses from the drop in Kwang Jin's long position.| Bookook Steel vs. Dong Il Steel | Bookook Steel vs. Seah Steel Corp | Bookook Steel vs. Ajusteel Co | Bookook Steel vs. Ni Steel |
| Kwang Jin vs. Wonil Special Steel | Kwang Jin vs. Bookook Steel | Kwang Jin vs. Kyeryong Construction Industrial | Kwang Jin vs. Hironic Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |