Correlation Between Daehan Steel and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Atinum Investment 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 Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Atinum Investment Co, you can compare the effects of market volatilities on Daehan Steel and Atinum Investment 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Atinum Investment.
Diversification Opportunities for Daehan Steel and Atinum Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daehan and Atinum is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Daehan Steel i.e., Daehan Steel and Atinum Investment go up and down completely randomly.
Pair Corralation between Daehan Steel and Atinum Investment
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.91 times more return on investment than Atinum Investment. However, Daehan Steel is 1.1 times less risky than Atinum Investment. It trades about 0.27 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.06 per unit of risk. If you would invest 1,306,000 in Daehan Steel on August 28, 2024 and sell it today you would earn a total of 214,000 from holding Daehan Steel or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Daehan Steel vs. Atinum Investment Co
Performance |
| Timeline |
| Daehan Steel |
| Atinum Investment |
Daehan Steel and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Atinum Investment
The main advantage of trading using opposite Daehan Steel and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Daehan Steel vs. LG Chemicals | Daehan Steel vs. Lotte Chemical Corp | Daehan Steel vs. Hyundai Steel | Daehan Steel vs. Seah Steel Corp |
| Atinum Investment vs. Korea New Network | Atinum Investment vs. Dong A Eltek | Atinum Investment vs. Dreamus Company | Atinum Investment vs. SK Bioscience 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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