Correlation Between Daehan Steel and PI Advanced
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and PI Advanced 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 PI Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and PI Advanced Materials, you can compare the effects of market volatilities on Daehan Steel and PI Advanced 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 PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and PI Advanced.
Diversification Opportunities for Daehan Steel and PI Advanced
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daehan and 178920 is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials 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 PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of Daehan Steel i.e., Daehan Steel and PI Advanced go up and down completely randomly.
Pair Corralation between Daehan Steel and PI Advanced
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.54 times more return on investment than PI Advanced. However, Daehan Steel is 1.84 times less risky than PI Advanced. It trades about 0.2 of its potential returns per unit of risk. PI Advanced Materials is currently generating about -0.21 per unit of risk. If you would invest 1,256,000 in Daehan Steel on September 2, 2024 and sell it today you would earn a total of 295,000 from holding Daehan Steel or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. PI Advanced Materials
Performance |
| Timeline |
| Daehan Steel |
| PI Advanced Materials |
Daehan Steel and PI Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and PI Advanced
The main advantage of trading using opposite Daehan Steel and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.| Daehan Steel vs. LG Chemicals | Daehan Steel vs. POSCO Holdings | Daehan Steel vs. Hanwha Solutions | Daehan Steel vs. Hyundai Steel |
| PI Advanced vs. Samsung Electronics Co | PI Advanced vs. Samsung Electronics Co | PI Advanced vs. LG Energy Solution | PI Advanced vs. SK Hynix |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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