Correlation Between Daehan Steel and EMnet
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and EMnet 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 EMnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and eMnet Inc, you can compare the effects of market volatilities on Daehan Steel and EMnet 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 EMnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and EMnet.
Diversification Opportunities for Daehan Steel and EMnet
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daehan and EMnet is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and eMnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMnet Inc 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 EMnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMnet Inc has no effect on the direction of Daehan Steel i.e., Daehan Steel and EMnet go up and down completely randomly.
Pair Corralation between Daehan Steel and EMnet
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.51 times more return on investment than EMnet. However, Daehan Steel is 1.95 times less risky than EMnet. It trades about 0.05 of its potential returns per unit of risk. eMnet Inc is currently generating about -0.01 per unit of risk. If you would invest 1,095,919 in Daehan Steel on December 4, 2024 and sell it today you would earn a total of 476,081 from holding Daehan Steel or generate 43.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. eMnet Inc
Performance |
| Timeline |
| Daehan Steel |
| eMnet Inc |
Daehan Steel and EMnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and EMnet
The main advantage of trading using opposite Daehan Steel and EMnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, EMnet 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 EMnet will offset losses from the drop in EMnet's long position.| Daehan Steel vs. Lotte Non Life Insurance | Daehan Steel vs. Dgb Financial | Daehan Steel vs. Dongbu Insurance Co | Daehan Steel vs. Seoyon Topmetal Co |
| EMnet vs. Shinhan Inverse Silver | EMnet vs. Infinitt Healthcare Co | EMnet vs. Cots Technology Co | EMnet vs. LG Household Healthcare |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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