Correlation Between BooKook Steel and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and DIGITAL CHOSUN 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 DIGITAL CHOSUN 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 DIGITAL CHOSUN, you can compare the effects of market volatilities on BooKook Steel and DIGITAL CHOSUN 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 DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and DIGITAL CHOSUN.
Diversification Opportunities for BooKook Steel and DIGITAL CHOSUN
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BooKook and DIGITAL is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of BooKook Steel i.e., BooKook Steel and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between BooKook Steel and DIGITAL CHOSUN
Assuming the 90 days trading horizon BooKook Steel Co is expected to generate 0.89 times more return on investment than DIGITAL CHOSUN. However, BooKook Steel Co is 1.12 times less risky than DIGITAL CHOSUN. It trades about 0.07 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.01 per unit of risk. If you would invest 241,000 in BooKook Steel Co on September 23, 2024 and sell it today you would earn a total of 8,000 from holding BooKook Steel Co or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| BooKook Steel |
| DIGITAL CHOSUN |
BooKook Steel and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and DIGITAL CHOSUN
The main advantage of trading using opposite BooKook Steel and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| BooKook Steel vs. AptaBio Therapeutics | BooKook Steel vs. Wonbang Tech Co | BooKook Steel vs. Busan Industrial Co | BooKook Steel vs. Busan Ind |
| DIGITAL CHOSUN vs. Samhyun Steel Co | DIGITAL CHOSUN vs. Finebesteel | DIGITAL CHOSUN vs. BooKook Steel Co | DIGITAL CHOSUN vs. Iljin Materials 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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