Correlation Between BooKook Steel and Clean Science
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Clean Science 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 Clean Science 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 Clean Science co, you can compare the effects of market volatilities on BooKook Steel and Clean Science 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 Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Clean Science.
Diversification Opportunities for BooKook Steel and Clean Science
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BooKook and Clean is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co 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 Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of BooKook Steel i.e., BooKook Steel and Clean Science go up and down completely randomly.
Pair Corralation between BooKook Steel and Clean Science
Assuming the 90 days trading horizon BooKook Steel Co is expected to generate 0.85 times more return on investment than Clean Science. However, BooKook Steel Co is 1.17 times less risky than Clean Science. It trades about 0.02 of its potential returns per unit of risk. Clean Science co is currently generating about -0.02 per unit of risk. If you would invest 247,350 in BooKook Steel Co on November 2, 2024 and sell it today you would earn a total of 5,150 from holding BooKook Steel Co or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. Clean Science co
Performance |
| Timeline |
| BooKook Steel |
| Clean Science co |
BooKook Steel and Clean Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Clean Science
The main advantage of trading using opposite BooKook Steel and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.| BooKook Steel vs. Playgram Co | BooKook Steel vs. Daeduck Electronics Co | BooKook Steel vs. Korea Electronic Certification | BooKook Steel vs. Jahwa Electronics Co |
| Clean Science vs. Aprogen Healthcare Games | Clean Science vs. DC Media Co | Clean Science vs. Jeju Air Co | Clean Science vs. Daewon Media 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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