Correlation Between Daehan Steel and Automobile
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Automobile 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 Daehan Steel and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Automobile Pc, you can compare the effects of market volatilities on Daehan Steel and Automobile 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 Daehan Steel with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Automobile.
Diversification Opportunities for Daehan Steel and Automobile
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daehan and Automobile is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Daehan 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 Daehan Steel are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Daehan Steel i.e., Daehan Steel and Automobile go up and down completely randomly.
Pair Corralation between Daehan Steel and Automobile
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.52 times more return on investment than Automobile. However, Daehan Steel is 1.94 times less risky than Automobile. It trades about -0.16 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.35 per unit of risk. If you would invest 1,619,000 in Daehan Steel on November 9, 2024 and sell it today you would lose (58,000) from holding Daehan Steel or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Automobile Pc
Performance |
| Timeline |
| Daehan Steel |
| Automobile Pc |
Daehan Steel and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Automobile
The main advantage of trading using opposite Daehan Steel and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Daehan Steel vs. Dongil Metal Co | Daehan Steel vs. Seoyon Topmetal Co | Daehan Steel vs. Lee Ku Industrial | Daehan Steel vs. Daejung Chemicals Metals |
| Automobile vs. Daiyang Metal Co | Automobile vs. Dongbang Transport Logistics | Automobile vs. System and Application | Automobile vs. Daishin Information Communications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |