Correlation Between KTB Investment and Dongbu Steel
Can any of the company-specific risk be diversified away by investing in both KTB Investment 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 KTB Investment and Dongbu Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and Dongbu Steel Co, you can compare the effects of market volatilities on KTB Investment 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 KTB Investment with a short position of Dongbu Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Dongbu Steel.
Diversification Opportunities for KTB Investment and Dongbu Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between KTB and Dongbu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Dongbu Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Steel and KTB Investment 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 KTB Investment Securities 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 KTB Investment i.e., KTB Investment and Dongbu Steel go up and down completely randomly.
Pair Corralation between KTB Investment and Dongbu Steel
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 0.53 times more return on investment than Dongbu Steel. However, KTB Investment Securities is 1.87 times less risky than Dongbu Steel. It trades about 0.07 of its potential returns per unit of risk. Dongbu Steel Co is currently generating about -0.06 per unit of risk. If you would invest 250,000 in KTB Investment Securities on September 13, 2024 and sell it today you would earn a total of 6,000 from holding KTB Investment Securities or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTB Investment Securities vs. Dongbu Steel Co
Performance |
| Timeline |
| KTB Investment Securities |
| Dongbu Steel |
KTB Investment and Dongbu Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTB Investment and Dongbu Steel
The main advantage of trading using opposite KTB Investment and Dongbu Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment 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.| KTB Investment vs. Samsung Electronics Co | KTB Investment vs. Samsung Electronics Co | KTB Investment vs. SK Hynix | KTB Investment vs. POSCO Holdings |
| Dongbu Steel vs. LG Chemicals | Dongbu Steel vs. POSCO Holdings | Dongbu Steel vs. Hanwha Solutions | Dongbu Steel vs. Lotte Chemical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |