Correlation Between Dong-A Steel and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both Dong-A Steel and SAMG Entertainment 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 SAMG Entertainment 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 SAMG Entertainment Co, you can compare the effects of market volatilities on Dong-A Steel and SAMG Entertainment 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 SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong-A Steel and SAMG Entertainment.
Diversification Opportunities for Dong-A Steel and SAMG Entertainment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong-A and SAMG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment 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 SAMG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMG Entertainment has no effect on the direction of Dong-A Steel i.e., Dong-A Steel and SAMG Entertainment go up and down completely randomly.
Pair Corralation between Dong-A Steel and SAMG Entertainment
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.79 times more return on investment than SAMG Entertainment. However, Dong A Steel Technology is 1.26 times less risky than SAMG Entertainment. It trades about -0.03 of its potential returns per unit of risk. SAMG Entertainment Co is currently generating about -0.03 per unit of risk. If you would invest 446,500 in Dong A Steel Technology on September 15, 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. SAMG Entertainment Co
Performance |
| Timeline |
| Dong A Steel |
| SAMG Entertainment |
Dong-A Steel and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong-A Steel and SAMG Entertainment
The main advantage of trading using opposite Dong-A Steel and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong-A Steel position performs unexpectedly, SAMG Entertainment 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 SAMG Entertainment will offset losses from the drop in SAMG Entertainment'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 |
| SAMG Entertainment vs. Daehan Steel | SAMG Entertainment vs. Hankook Steel Co | SAMG Entertainment vs. Daedong Steel Co | SAMG Entertainment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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