Correlation Between Daehan Steel and KTB Investment
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and KTB 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 KTB 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 KTB Investment Securities, you can compare the effects of market volatilities on Daehan Steel and KTB 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 KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and KTB Investment.
Diversification Opportunities for Daehan Steel and KTB Investment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daehan and KTB is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities 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 KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of Daehan Steel i.e., Daehan Steel and KTB Investment go up and down completely randomly.
Pair Corralation between Daehan Steel and KTB Investment
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.53 times more return on investment than KTB Investment. However, Daehan Steel is 1.89 times less risky than KTB Investment. It trades about 0.2 of its potential returns per unit of risk. KTB Investment Securities is currently generating about -0.17 per unit of risk. If you would invest 1,604,000 in Daehan Steel on November 4, 2024 and sell it today you would earn a total of 53,000 from holding Daehan Steel or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. KTB Investment Securities
Performance |
| Timeline |
| Daehan Steel |
| KTB Investment Securities |
Daehan Steel and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and KTB Investment
The main advantage of trading using opposite Daehan Steel and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, KTB 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 KTB Investment will offset losses from the drop in KTB Investment's long position.| Daehan Steel vs. KTB Investment Securities | Daehan Steel vs. Kukdong Oil Chemicals | Daehan Steel vs. DSC Investment | Daehan Steel vs. Nh Investment And |
| KTB Investment vs. E Investment Development | KTB Investment vs. Hanmi Semiconductor Co | KTB Investment vs. Hannong Chemicals | KTB Investment vs. LB Investment |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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