Correlation Between Daedong Steel and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both Daedong Steel and ASTORY CoLtd 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 Daedong Steel and ASTORY CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daedong Steel Co and ASTORY CoLtd, you can compare the effects of market volatilities on Daedong Steel and ASTORY CoLtd 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 Daedong Steel with a short position of ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Steel and ASTORY CoLtd.
Diversification Opportunities for Daedong Steel and ASTORY CoLtd
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daedong and ASTORY is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Steel Co and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd and Daedong 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 Daedong Steel Co are associated (or correlated) with ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of Daedong Steel i.e., Daedong Steel and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between Daedong Steel and ASTORY CoLtd
Assuming the 90 days trading horizon Daedong Steel Co is expected to generate 1.19 times more return on investment than ASTORY CoLtd. However, Daedong Steel is 1.19 times more volatile than ASTORY CoLtd. It trades about 0.0 of its potential returns per unit of risk. ASTORY CoLtd is currently generating about -0.09 per unit of risk. If you would invest 420,066 in Daedong Steel Co on August 31, 2024 and sell it today you would lose (61,066) from holding Daedong Steel Co or give up 14.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Daedong Steel Co vs. ASTORY CoLtd
Performance |
| Timeline |
| Daedong Steel |
| ASTORY CoLtd |
Daedong Steel and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Steel and ASTORY CoLtd
The main advantage of trading using opposite Daedong Steel and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Steel position performs unexpectedly, ASTORY CoLtd 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd's long position.| Daedong Steel vs. Keum Kang Steel | Daedong Steel vs. Tplex Co | Daedong Steel vs. PJ Metal Co | Daedong Steel vs. Gyeongnam Steel Co |
| ASTORY CoLtd vs. Hansol Homedeco Co | ASTORY CoLtd vs. Cuckoo Homesys Co | ASTORY CoLtd vs. Daedong Steel Co | ASTORY CoLtd vs. Hyundai Home Shopping |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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