Correlation Between Gyeongnam Steel and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Gyeongnam Steel and Konan Technology 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 Gyeongnam Steel and Konan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gyeongnam Steel Co and Konan Technology, you can compare the effects of market volatilities on Gyeongnam Steel and Konan Technology 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 Gyeongnam Steel with a short position of Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyeongnam Steel and Konan Technology.
Diversification Opportunities for Gyeongnam Steel and Konan Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gyeongnam and Konan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gyeongnam Steel Co and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology and Gyeongnam Steel 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 Gyeongnam Steel Co are associated (or correlated) with Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Gyeongnam Steel i.e., Gyeongnam Steel and Konan Technology go up and down completely randomly.
Pair Corralation between Gyeongnam Steel and Konan Technology
Assuming the 90 days trading horizon Gyeongnam Steel Co is expected to generate 0.39 times more return on investment than Konan Technology. However, Gyeongnam Steel Co is 2.57 times less risky than Konan Technology. It trades about -0.01 of its potential returns per unit of risk. Konan Technology is currently generating about 0.0 per unit of risk. If you would invest 304,241 in Gyeongnam Steel Co on September 2, 2024 and sell it today you would lose (14,741) from holding Gyeongnam Steel Co or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gyeongnam Steel Co vs. Konan Technology
Performance |
| Timeline |
| Gyeongnam Steel |
| Konan Technology |
Gyeongnam Steel and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gyeongnam Steel and Konan Technology
The main advantage of trading using opposite Gyeongnam Steel and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gyeongnam Steel position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Gyeongnam Steel vs. Keum Kang Steel | Gyeongnam Steel vs. Tplex Co | Gyeongnam Steel vs. Jeil Steel Mfg | Gyeongnam Steel vs. Wonil Special Steel |
| Konan Technology vs. Devsisters corporation | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. InfoBank |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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