Correlation Between Bookook Steel and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Dongil Metal 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 Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and Dongil Metal Co, you can compare the effects of market volatilities on Bookook Steel and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Dongil Metal.
Diversification Opportunities for Bookook Steel and Dongil Metal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bookook and Dongil is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Bookook Steel i.e., Bookook Steel and Dongil Metal go up and down completely randomly.
Pair Corralation between Bookook Steel and Dongil Metal
Assuming the 90 days trading horizon Bookook Steel is expected to generate 1.88 times more return on investment than Dongil Metal. However, Bookook Steel is 1.88 times more volatile than Dongil Metal Co. It trades about 0.08 of its potential returns per unit of risk. Dongil Metal Co is currently generating about -0.22 per unit of risk. If you would invest 237,500 in Bookook Steel on September 24, 2024 and sell it today you would earn a total of 8,500 from holding Bookook Steel or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bookook Steel vs. Dongil Metal Co
Performance |
| Timeline |
| Bookook Steel |
| Dongil Metal |
Bookook Steel and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and Dongil Metal
The main advantage of trading using opposite Bookook Steel and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Bookook Steel vs. Pureun Mutual Savings | Bookook Steel vs. Wonil Special Steel | Bookook Steel vs. KakaoBank Corp | Bookook Steel vs. Jeil Steel Mfg |
| Dongil Metal vs. INSUN Environmental New | Dongil Metal vs. Finebesteel | Dongil Metal vs. Bookook Steel | Dongil Metal vs. J Steel 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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