Correlation Between Bookook Steel and Settlebank
Can any of the company-specific risk be diversified away by investing in both Bookook Steel and Settlebank 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 Settlebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bookook Steel and Settlebank, you can compare the effects of market volatilities on Bookook Steel and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bookook Steel and Settlebank.
Diversification Opportunities for Bookook Steel and Settlebank
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bookook and Settlebank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bookook Steel and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Bookook Steel i.e., Bookook Steel and Settlebank go up and down completely randomly.
Pair Corralation between Bookook Steel and Settlebank
Assuming the 90 days trading horizon Bookook Steel is expected to generate 0.72 times more return on investment than Settlebank. However, Bookook Steel is 1.39 times less risky than Settlebank. It trades about -0.1 of its potential returns per unit of risk. Settlebank is currently generating about -0.19 per unit of risk. If you would invest 249,000 in Bookook Steel on September 1, 2024 and sell it today you would lose (11,000) from holding Bookook Steel or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bookook Steel vs. Settlebank
Performance |
| Timeline |
| Bookook Steel |
| Settlebank |
Bookook Steel and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bookook Steel and Settlebank
The main advantage of trading using opposite Bookook Steel and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bookook Steel position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Bookook Steel vs. Settlebank | Bookook Steel vs. DB Financial Investment | Bookook Steel vs. PJ Electronics Co | Bookook Steel vs. Korea Electronic Certification |
| Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind | Settlebank vs. Mirae Asset Daewoo | Settlebank vs. Finebesteel |
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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