Correlation Between Kukil Metal and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Daechang 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 Kukil Metal and Daechang Steel 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 Daechang Steel Co, you can compare the effects of market volatilities on Kukil Metal and Daechang 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 Kukil Metal with a short position of Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Daechang Steel.
Diversification Opportunities for Kukil Metal and Daechang Steel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukil and Daechang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang Steel 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 Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of Kukil Metal i.e., Kukil Metal and Daechang Steel go up and down completely randomly.
Pair Corralation between Kukil Metal and Daechang Steel
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 0.81 times more return on investment than Daechang Steel. However, Kukil Metal Co is 1.24 times less risky than Daechang Steel. It trades about 0.09 of its potential returns per unit of risk. Daechang Steel Co is currently generating about -0.04 per unit of risk. If you would invest 173,000 in Kukil Metal Co on October 30, 2024 and sell it today you would earn a total of 2,800 from holding Kukil Metal Co or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Daechang Steel Co
Performance |
| Timeline |
| Kukil Metal |
| Daechang Steel |
Kukil Metal and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Daechang Steel
The main advantage of trading using opposite Kukil Metal and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Daechang 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 Daechang Steel will offset losses from the drop in Daechang Steel's long position.| Kukil Metal vs. Daejoo Electronic Materials | Kukil Metal vs. DB Insurance Co | Kukil Metal vs. RF Materials Co | Kukil Metal vs. Hyosung Advanced Materials |
| Daechang Steel vs. INNOX Advanced Materials | Daechang Steel vs. LAKE MATERIALS LTD | Daechang Steel vs. Shinsegae Engineering Construction | Daechang Steel vs. Hyundai Engineering Construction |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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