Correlation Between Nice Information and DONGKUK STEEL
Can any of the company-specific risk be diversified away by investing in both Nice Information and DONGKUK 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 Nice Information and DONGKUK STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice Information Telecommunication and DONGKUK STEEL MILL, you can compare the effects of market volatilities on Nice Information and DONGKUK 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 Nice Information with a short position of DONGKUK STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and DONGKUK STEEL.
Diversification Opportunities for Nice Information and DONGKUK STEEL
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nice and DONGKUK is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and DONGKUK STEEL MILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK STEEL MILL and Nice Information 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 Nice Information Telecommunication are associated (or correlated) with DONGKUK STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK STEEL MILL has no effect on the direction of Nice Information i.e., Nice Information and DONGKUK STEEL go up and down completely randomly.
Pair Corralation between Nice Information and DONGKUK STEEL
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.43 times more return on investment than DONGKUK STEEL. However, Nice Information Telecommunication is 2.34 times less risky than DONGKUK STEEL. It trades about -0.04 of its potential returns per unit of risk. DONGKUK STEEL MILL is currently generating about -0.03 per unit of risk. If you would invest 2,622,134 in Nice Information Telecommunication on September 3, 2024 and sell it today you would lose (781,134) from holding Nice Information Telecommunication or give up 29.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.12% |
| Values | Daily Returns |
Nice Information Telecommunica vs. DONGKUK STEEL MILL
Performance |
| Timeline |
| Nice Information Tel |
| DONGKUK STEEL MILL |
Nice Information and DONGKUK STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and DONGKUK STEEL
The main advantage of trading using opposite Nice Information and DONGKUK STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, DONGKUK 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 DONGKUK STEEL will offset losses from the drop in DONGKUK STEEL's long position.| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV Co |
| DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. LG Energy Solution | DONGKUK STEEL vs. SK Hynix |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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