Correlation Between Kisan Telecom and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both Kisan Telecom 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 Kisan Telecom and Daechang 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 Daechang Steel Co, you can compare the effects of market volatilities on Kisan Telecom 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 Kisan Telecom with a short position of Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kisan Telecom and Daechang Steel.
Diversification Opportunities for Kisan Telecom and Daechang Steel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kisan and Daechang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom 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 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 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 Kisan Telecom i.e., Kisan Telecom and Daechang Steel go up and down completely randomly.
Pair Corralation between Kisan Telecom and Daechang Steel
Assuming the 90 days trading horizon Kisan Telecom Co is expected to under-perform the Daechang Steel. In addition to that, Kisan Telecom is 1.48 times more volatile than Daechang Steel Co. It trades about -0.03 of its total potential returns per unit of risk. Daechang Steel Co is currently generating about -0.02 per unit of volatility. If you would invest 252,130 in Daechang Steel Co on November 7, 2024 and sell it today you would lose (47,130) from holding Daechang Steel Co or give up 18.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kisan Telecom Co vs. Daechang Steel Co
Performance |
| Timeline |
| Kisan Telecom |
| Daechang Steel |
Kisan Telecom and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kisan Telecom and Daechang Steel
The main advantage of trading using opposite Kisan Telecom and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kisan Telecom 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.| Kisan Telecom vs. Top Material Co | Kisan Telecom vs. iNtRON Biotechnology | Kisan Telecom vs. Ecoplastic | Kisan Telecom vs. Hyosung Advanced Materials |
| Daechang Steel vs. FNC Entertainment Co | Daechang Steel vs. Seoul Electronics Telecom | Daechang Steel vs. Nable Communications | Daechang Steel vs. YG Entertainment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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