Correlation Between Dong-A Steel and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Dong-A Steel and Daebo Magnetic 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 Daebo Magnetic 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 Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Dong-A Steel and Daebo Magnetic 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 Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong-A Steel and Daebo Magnetic.
Diversification Opportunities for Dong-A Steel and Daebo Magnetic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dong-A and Daebo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd 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 Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Dong-A Steel i.e., Dong-A Steel and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Dong-A Steel and Daebo Magnetic
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.99 times more return on investment than Daebo Magnetic. However, Dong A Steel Technology is 1.01 times less risky than Daebo Magnetic. It trades about -0.03 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.09 per unit of risk. If you would invest 446,500 in Dong A Steel Technology on September 14, 2024 and sell it today you would lose (143,000) from holding Dong A Steel Technology or give up 32.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Dong A Steel |
| Daebo Magnetic CoLtd |
Dong-A Steel and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong-A Steel and Daebo Magnetic
The main advantage of trading using opposite Dong-A Steel and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong-A Steel position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Dong-A Steel vs. Samsung Electronics Co | Dong-A Steel vs. Samsung Electronics Co | Dong-A Steel vs. SK Hynix | Dong-A Steel vs. POSCO Holdings |
| Daebo Magnetic vs. Moonbae Steel | Daebo Magnetic vs. Dongbu Steel Co | Daebo Magnetic vs. Foodnamoo | Daebo Magnetic vs. Dong A Steel 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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