Correlation Between Vissem Electronics and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Vissem Electronics and Korea 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 Vissem Electronics and Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vissem Electronics Co and Korea Steel Co, you can compare the effects of market volatilities on Vissem Electronics and Korea 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 Vissem Electronics with a short position of Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vissem Electronics and Korea Steel.
Diversification Opportunities for Vissem Electronics and Korea Steel
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vissem and Korea is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vissem Electronics Co and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel and Vissem Electronics 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 Vissem Electronics Co are associated (or correlated) with Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Vissem Electronics i.e., Vissem Electronics and Korea Steel go up and down completely randomly.
Pair Corralation between Vissem Electronics and Korea Steel
Assuming the 90 days trading horizon Vissem Electronics Co is expected to generate 0.91 times more return on investment than Korea Steel. However, Vissem Electronics Co is 1.1 times less risky than Korea Steel. It trades about 0.13 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.1 per unit of risk. If you would invest 352,500 in Vissem Electronics Co on October 29, 2024 and sell it today you would earn a total of 9,000 from holding Vissem Electronics Co or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vissem Electronics Co vs. Korea Steel Co
Performance |
| Timeline |
| Vissem Electronics |
| Korea Steel |
Vissem Electronics and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vissem Electronics and Korea Steel
The main advantage of trading using opposite Vissem Electronics and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vissem Electronics position performs unexpectedly, Korea 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Vissem Electronics vs. Daesung Hi Tech Co | Vissem Electronics vs. Iljin Display | Vissem Electronics vs. InfoBank | Vissem Electronics vs. KB Financial Group |
| Korea Steel vs. Finebesteel | Korea Steel vs. Seah Steel Corp | Korea Steel vs. Dongil Metal Co | Korea Steel vs. Daechang Steel Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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