Correlation Between ChipsMedia and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both ChipsMedia and Daehan Steel 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 ChipsMedia and Daehan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Daehan Steel, you can compare the effects of market volatilities on ChipsMedia and Daehan Steel 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 ChipsMedia with a short position of Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Daehan Steel.
Diversification Opportunities for ChipsMedia and Daehan Steel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChipsMedia and Daehan is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel and ChipsMedia 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 ChipsMedia are associated (or correlated) with Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of ChipsMedia i.e., ChipsMedia and Daehan Steel go up and down completely randomly.
Pair Corralation between ChipsMedia and Daehan Steel
Assuming the 90 days trading horizon ChipsMedia is expected to under-perform the Daehan Steel. In addition to that, ChipsMedia is 1.75 times more volatile than Daehan Steel. It trades about -0.05 of its total potential returns per unit of risk. Daehan Steel is currently generating about 0.18 per unit of volatility. If you would invest 1,383,000 in Daehan Steel on September 13, 2024 and sell it today you would earn a total of 232,000 from holding Daehan Steel or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Daehan Steel
Performance |
| Timeline |
| ChipsMedia |
| Daehan Steel |
ChipsMedia and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Daehan Steel
The main advantage of trading using opposite ChipsMedia and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia position performs unexpectedly, Daehan Steel 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 Daehan Steel will offset losses from the drop in Daehan Steel's long position.| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
| Daehan Steel vs. LG Chemicals | Daehan Steel vs. POSCO Holdings | Daehan Steel vs. Hanwha Solutions | Daehan Steel vs. Lotte Chemical Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges |