Correlation Between BooKook Steel and Dongbu Steel
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Dongbu 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 Dongbu 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 Dongbu Steel Co, you can compare the effects of market volatilities on BooKook Steel and Dongbu 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 Dongbu Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Dongbu Steel.
Diversification Opportunities for BooKook Steel and Dongbu Steel
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BooKook and Dongbu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Dongbu Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu 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 Dongbu Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbu Steel has no effect on the direction of BooKook Steel i.e., BooKook Steel and Dongbu Steel go up and down completely randomly.
Pair Corralation between BooKook Steel and Dongbu Steel
Assuming the 90 days trading horizon BooKook Steel Co is expected to under-perform the Dongbu Steel. But the stock apears to be less risky and, when comparing its historical volatility, BooKook Steel Co is 1.33 times less risky than Dongbu Steel. The stock trades about -0.09 of its potential returns per unit of risk. The Dongbu Steel Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 676,000 in Dongbu Steel Co on September 2, 2024 and sell it today you would lose (14,000) from holding Dongbu Steel Co or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. Dongbu Steel Co
Performance |
| Timeline |
| BooKook Steel |
| Dongbu Steel |
BooKook Steel and Dongbu Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Dongbu Steel
The main advantage of trading using opposite BooKook Steel and Dongbu Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Dongbu 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 Dongbu Steel will offset losses from the drop in Dongbu Steel's long position.| BooKook Steel vs. AptaBio Therapeutics | BooKook Steel vs. Daewoo SBI SPAC | BooKook Steel vs. Dream Security co | BooKook Steel vs. Microfriend |
| Dongbu Steel vs. LG Chemicals | Dongbu Steel vs. POSCO Holdings | Dongbu Steel vs. Hanwha Solutions | Dongbu Steel vs. Hyundai Steel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |