Correlation Between BYON and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both BYON and Daechang 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 BYON and Daechang Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYON Co and Daechang Steel Co, you can compare the effects of market volatilities on BYON and Daechang 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 BYON with a short position of Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYON and Daechang Steel.
Diversification Opportunities for BYON and Daechang Steel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYON and Daechang is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BYON Co and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang Steel and BYON 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 BYON Co are associated (or correlated) with Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of BYON i.e., BYON and Daechang Steel go up and down completely randomly.
Pair Corralation between BYON and Daechang Steel
Assuming the 90 days trading horizon BYON Co is expected to under-perform the Daechang Steel. In addition to that, BYON is 2.91 times more volatile than Daechang Steel Co. It trades about -0.04 of its total potential returns per unit of risk. Daechang Steel Co is currently generating about -0.03 per unit of volatility. If you would invest 240,296 in Daechang Steel Co on November 3, 2024 and sell it today you would lose (35,296) from holding Daechang Steel Co or give up 14.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYON Co vs. Daechang Steel Co
Performance |
| Timeline |
| BYON |
| Daechang Steel |
BYON and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYON and Daechang Steel
The main advantage of trading using opposite BYON and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYON position performs unexpectedly, Daechang 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 Daechang Steel will offset losses from the drop in Daechang Steel's long position.| BYON vs. INNOX Advanced Materials | BYON vs. Seoyon Topmetal Co | BYON vs. Formetal Co | BYON vs. MetaLabs Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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