Correlation Between Daehan Steel and Withuspharmaceutical
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Withuspharmaceutical 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 Withuspharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Withuspharmaceutical CoLtd, you can compare the effects of market volatilities on Daehan Steel and Withuspharmaceutical 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 Withuspharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Withuspharmaceutical.
Diversification Opportunities for Daehan Steel and Withuspharmaceutical
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daehan and Withuspharmaceutical is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Withuspharmaceutical CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Withuspharmaceutical 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 Withuspharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Withuspharmaceutical has no effect on the direction of Daehan Steel i.e., Daehan Steel and Withuspharmaceutical go up and down completely randomly.
Pair Corralation between Daehan Steel and Withuspharmaceutical
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.54 times more return on investment than Withuspharmaceutical. However, Daehan Steel is 1.84 times less risky than Withuspharmaceutical. It trades about 0.12 of its potential returns per unit of risk. Withuspharmaceutical CoLtd is currently generating about -0.16 per unit of risk. If you would invest 1,500,000 in Daehan Steel on September 4, 2024 and sell it today you would earn a total of 50,000 from holding Daehan Steel or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Withuspharmaceutical CoLtd
Performance |
| Timeline |
| Daehan Steel |
| Withuspharmaceutical |
Daehan Steel and Withuspharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Withuspharmaceutical
The main advantage of trading using opposite Daehan Steel and Withuspharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Withuspharmaceutical 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 Withuspharmaceutical will offset losses from the drop in Withuspharmaceutical's long position.| Daehan Steel vs. LG Chemicals | Daehan Steel vs. POSCO Holdings | Daehan Steel vs. Lotte Chemical Corp | Daehan Steel vs. Hyundai Steel |
| Withuspharmaceutical vs. Neungyule Education | Withuspharmaceutical vs. Haitai Confectionery Foods | Withuspharmaceutical vs. Daehan Steel | Withuspharmaceutical vs. Hankook Steel 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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