Correlation Between BooKook Steel and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Moonbae Steel 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 Moonbae Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BooKook Steel Co and Moonbae Steel, you can compare the effects of market volatilities on BooKook Steel and Moonbae Steel 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 Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Moonbae Steel.
Diversification Opportunities for BooKook Steel and Moonbae Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BooKook and Moonbae is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel 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 Co are associated (or correlated) with Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of BooKook Steel i.e., BooKook Steel and Moonbae Steel go up and down completely randomly.
Pair Corralation between BooKook Steel and Moonbae Steel
Assuming the 90 days trading horizon BooKook Steel Co is expected to generate 1.57 times more return on investment than Moonbae Steel. However, BooKook Steel is 1.57 times more volatile than Moonbae Steel. It trades about 0.24 of its potential returns per unit of risk. Moonbae Steel is currently generating about -0.04 per unit of risk. If you would invest 233,285 in BooKook Steel Co on October 20, 2024 and sell it today you would earn a total of 23,715 from holding BooKook Steel Co or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. Moonbae Steel
Performance |
| Timeline |
| BooKook Steel |
| Moonbae Steel |
BooKook Steel and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Moonbae Steel
The main advantage of trading using opposite BooKook Steel and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Moonbae Steel 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| BooKook Steel vs. PNC Technologies co | BooKook Steel vs. CU Tech Corp | BooKook Steel vs. Amogreentech Co | BooKook Steel vs. Top Material Co |
| Moonbae Steel vs. PlayD Co | Moonbae Steel vs. Aprogen Healthcare Games | Moonbae Steel vs. Kakao Games Corp | Moonbae Steel vs. Seoyon Topmetal 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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