Correlation Between Kukil Metal and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Dongwon Metal 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 Kukil Metal and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Dongwon Metal Co, you can compare the effects of market volatilities on Kukil Metal and Dongwon Metal 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 Kukil Metal with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Dongwon Metal.
Diversification Opportunities for Kukil Metal and Dongwon Metal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukil and Dongwon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Kukil Metal 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 Kukil Metal Co are associated (or correlated) with Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Kukil Metal i.e., Kukil Metal and Dongwon Metal go up and down completely randomly.
Pair Corralation between Kukil Metal and Dongwon Metal
Assuming the 90 days trading horizon Kukil Metal Co is expected to under-perform the Dongwon Metal. But the stock apears to be less risky and, when comparing its historical volatility, Kukil Metal Co is 1.36 times less risky than Dongwon Metal. The stock trades about -0.23 of its potential returns per unit of risk. The Dongwon Metal Co is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 122,100 in Dongwon Metal Co on August 24, 2024 and sell it today you would lose (8,500) from holding Dongwon Metal Co or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Dongwon Metal Co
Performance |
| Timeline |
| Kukil Metal |
| Dongwon Metal |
Kukil Metal and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Dongwon Metal
The main advantage of trading using opposite Kukil Metal and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Dongwon Metal 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 Dongwon Metal will offset losses from the drop in Dongwon Metal's long position.| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel Co |
| Dongwon Metal vs. AptaBio Therapeutics | Dongwon Metal vs. Daewoo SBI SPAC | Dongwon Metal vs. Dream Security co | Dongwon Metal vs. Microfriend |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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