Correlation Between Dong-A Steel and TS Investment
Can any of the company-specific risk be diversified away by investing in both Dong-A Steel and TS Investment 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 Dong-A Steel and TS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Steel Technology and TS Investment Corp, you can compare the effects of market volatilities on Dong-A Steel and TS Investment 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 Dong-A Steel with a short position of TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong-A Steel and TS Investment.
Diversification Opportunities for Dong-A Steel and TS Investment
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong-A and 246690 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp and Dong-A 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 Dong A Steel Technology are associated (or correlated) with TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of Dong-A Steel i.e., Dong-A Steel and TS Investment go up and down completely randomly.
Pair Corralation between Dong-A Steel and TS Investment
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 1.46 times more return on investment than TS Investment. However, Dong-A Steel is 1.46 times more volatile than TS Investment Corp. It trades about 0.01 of its potential returns per unit of risk. TS Investment Corp is currently generating about -0.04 per unit of risk. If you would invest 312,500 in Dong A Steel Technology on September 25, 2024 and sell it today you would lose (19,000) from holding Dong A Steel Technology or give up 6.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. TS Investment Corp
Performance |
| Timeline |
| Dong A Steel |
| TS Investment Corp |
Dong-A Steel and TS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong-A Steel and TS Investment
The main advantage of trading using opposite Dong-A Steel and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong-A Steel position performs unexpectedly, TS Investment 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 TS Investment will offset losses from the drop in TS Investment's long position.| Dong-A Steel vs. AptaBio Therapeutics | Dong-A Steel vs. Wonbang Tech Co | Dong-A Steel vs. Busan Industrial Co | Dong-A Steel vs. Busan Ind |
| TS Investment vs. Cots Technology Co | TS Investment vs. Dong A Steel Technology | TS Investment vs. Hyundai Green Food | TS Investment vs. KG Eco Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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