Correlation Between Nara Mold and Gyeongnam Steel
Can any of the company-specific risk be diversified away by investing in both Nara Mold and Gyeongnam 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 Nara Mold and Gyeongnam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nara Mold Die and Gyeongnam Steel Co, you can compare the effects of market volatilities on Nara Mold and Gyeongnam 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 Nara Mold with a short position of Gyeongnam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nara Mold and Gyeongnam Steel.
Diversification Opportunities for Nara Mold and Gyeongnam Steel
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nara and Gyeongnam is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nara Mold Die and Gyeongnam Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyeongnam Steel and Nara Mold 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 Nara Mold Die are associated (or correlated) with Gyeongnam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyeongnam Steel has no effect on the direction of Nara Mold i.e., Nara Mold and Gyeongnam Steel go up and down completely randomly.
Pair Corralation between Nara Mold and Gyeongnam Steel
Assuming the 90 days trading horizon Nara Mold Die is expected to under-perform the Gyeongnam Steel. In addition to that, Nara Mold is 2.32 times more volatile than Gyeongnam Steel Co. It trades about -0.14 of its total potential returns per unit of risk. Gyeongnam Steel Co is currently generating about 0.02 per unit of volatility. If you would invest 292,000 in Gyeongnam Steel Co on August 31, 2024 and sell it today you would earn a total of 1,500 from holding Gyeongnam Steel Co or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nara Mold Die vs. Gyeongnam Steel Co
Performance |
| Timeline |
| Nara Mold Die |
| Gyeongnam Steel |
Nara Mold and Gyeongnam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nara Mold and Gyeongnam Steel
The main advantage of trading using opposite Nara Mold and Gyeongnam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nara Mold position performs unexpectedly, Gyeongnam 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 Gyeongnam Steel will offset losses from the drop in Gyeongnam Steel's long position.| Nara Mold vs. KT Submarine Telecom | Nara Mold vs. Wonil Special Steel | Nara Mold vs. Automobile Pc | Nara Mold vs. Iljin Display |
| Gyeongnam Steel vs. Kbi Metal Co | Gyeongnam Steel vs. Heungkuk Metaltech CoLtd | Gyeongnam Steel vs. Hanjoo Light Metal | Gyeongnam Steel vs. Samlip General Foods |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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