Correlation Between Daehan Steel and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Fine Besteel 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 Fine Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Fine Besteel Co, you can compare the effects of market volatilities on Daehan Steel and Fine Besteel 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 Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Fine Besteel.
Diversification Opportunities for Daehan Steel and Fine Besteel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daehan and Fine is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel 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 Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of Daehan Steel i.e., Daehan Steel and Fine Besteel go up and down completely randomly.
Pair Corralation between Daehan Steel and Fine Besteel
Assuming the 90 days trading horizon Daehan Steel is expected to under-perform the Fine Besteel. But the stock apears to be less risky and, when comparing its historical volatility, Daehan Steel is 2.72 times less risky than Fine Besteel. The stock trades about -0.16 of its potential returns per unit of risk. The Fine Besteel Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 94,700 in Fine Besteel Co on November 9, 2024 and sell it today you would earn a total of 17,300 from holding Fine Besteel Co or generate 18.27% 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. Fine Besteel Co
Performance |
| Timeline |
| Daehan Steel |
| Fine Besteel |
Daehan Steel and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Fine Besteel
The main advantage of trading using opposite Daehan Steel and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Fine Besteel 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 Fine Besteel will offset losses from the drop in Fine Besteel'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 |
| Fine Besteel vs. Vina Technology Co | Fine Besteel vs. Digital Imaging Technology | Fine Besteel vs. HB Technology TD | Fine Besteel vs. Hannong Chemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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