Correlation Between Daehan Steel and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Sungchang Autotech 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 Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Sungchang Autotech Co, you can compare the effects of market volatilities on Daehan Steel and Sungchang Autotech 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 Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Sungchang Autotech.
Diversification Opportunities for Daehan Steel and Sungchang Autotech
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daehan and Sungchang is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech 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 Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Daehan Steel i.e., Daehan Steel and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Daehan Steel and Sungchang Autotech
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.99 times more return on investment than Sungchang Autotech. However, Daehan Steel is 1.01 times less risky than Sungchang Autotech. It trades about 0.19 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.12 per unit of risk. If you would invest 1,351,000 in Daehan Steel on August 25, 2024 and sell it today you would earn a total of 167,000 from holding Daehan Steel or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Sungchang Autotech Co
Performance |
| Timeline |
| Daehan Steel |
| Sungchang Autotech |
Daehan Steel and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Sungchang Autotech
The main advantage of trading using opposite Daehan Steel and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Daehan Steel vs. Sungchang Autotech Co | Daehan Steel vs. Nh Investment And | Daehan Steel vs. Lion Chemtech Co | Daehan Steel vs. EBEST Investment Securities |
| Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. Busan Ind | Sungchang Autotech vs. Mirae Asset Daewoo | Sungchang Autotech vs. UNISEM 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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