Correlation Between Kisan Telecom and Dongbu Steel
Can any of the company-specific risk be diversified away by investing in both Kisan Telecom 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 Kisan Telecom and Dongbu Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kisan Telecom Co and Dongbu Steel Co, you can compare the effects of market volatilities on Kisan Telecom 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 Kisan Telecom with a short position of Dongbu Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kisan Telecom and Dongbu Steel.
Diversification Opportunities for Kisan Telecom and Dongbu Steel
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kisan and Dongbu is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom Co and Dongbu Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbu Steel and Kisan Telecom 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 Kisan Telecom Co 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 Kisan Telecom i.e., Kisan Telecom and Dongbu Steel go up and down completely randomly.
Pair Corralation between Kisan Telecom and Dongbu Steel
Assuming the 90 days trading horizon Kisan Telecom Co is expected to generate 0.49 times more return on investment than Dongbu Steel. However, Kisan Telecom Co is 2.03 times less risky than Dongbu Steel. It trades about 0.02 of its potential returns per unit of risk. Dongbu Steel Co is currently generating about -0.03 per unit of risk. If you would invest 176,200 in Kisan Telecom Co on September 2, 2024 and sell it today you would earn a total of 800.00 from holding Kisan Telecom Co or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kisan Telecom Co vs. Dongbu Steel Co
Performance |
| Timeline |
| Kisan Telecom |
| Dongbu Steel |
Kisan Telecom and Dongbu Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kisan Telecom and Dongbu Steel
The main advantage of trading using opposite Kisan Telecom and Dongbu Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kisan Telecom 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.| Kisan Telecom vs. Dongsin Engineering Construction | Kisan Telecom vs. Doosan Fuel Cell | Kisan Telecom vs. Daishin Balance 1 | Kisan Telecom vs. Total Soft Bank |
| Dongbu Steel vs. LG Chemicals | Dongbu Steel vs. POSCO Holdings | Dongbu Steel vs. Hanwha Solutions | Dongbu Steel vs. Hyundai Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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