Correlation Between BooKook Steel and Asia Economy
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Asia Economy 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 Asia Economy 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 Asia Economy Daily, you can compare the effects of market volatilities on BooKook Steel and Asia Economy 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 Asia Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Asia Economy.
Diversification Opportunities for BooKook Steel and Asia Economy
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BooKook and Asia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Asia Economy Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Economy Daily 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 Asia Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Economy Daily has no effect on the direction of BooKook Steel i.e., BooKook Steel and Asia Economy go up and down completely randomly.
Pair Corralation between BooKook Steel and Asia Economy
Assuming the 90 days trading horizon BooKook Steel Co is expected to under-perform the Asia Economy. In addition to that, BooKook Steel is 1.84 times more volatile than Asia Economy Daily. It trades about -0.02 of its total potential returns per unit of risk. Asia Economy Daily is currently generating about 0.02 per unit of volatility. If you would invest 140,800 in Asia Economy Daily on September 12, 2024 and sell it today you would earn a total of 8,200 from holding Asia Economy Daily or generate 5.82% 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. Asia Economy Daily
Performance |
| Timeline |
| BooKook Steel |
| Asia Economy Daily |
BooKook Steel and Asia Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Asia Economy
The main advantage of trading using opposite BooKook Steel and Asia Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Asia Economy 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 Asia Economy will offset losses from the drop in Asia Economy's long position.| BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. SK Hynix | BooKook Steel vs. POSCO Holdings |
| Asia Economy vs. BooKook Steel Co | Asia Economy vs. Kaonmedia Co | Asia Economy vs. DB Insurance Co | Asia Economy vs. Kakao Games Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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