Correlation Between Koh Young and Bookook Steel
Can any of the company-specific risk be diversified away by investing in both Koh Young and Bookook 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 Koh Young and Bookook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and Bookook Steel, you can compare the effects of market volatilities on Koh Young and Bookook 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 Koh Young with a short position of Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Bookook Steel.
Diversification Opportunities for Koh Young and Bookook Steel
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koh and Bookook is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook Steel and Koh Young 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 Koh Young Technology are associated (or correlated) with Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of Koh Young i.e., Koh Young and Bookook Steel go up and down completely randomly.
Pair Corralation between Koh Young and Bookook Steel
Assuming the 90 days trading horizon Koh Young Technology is expected to generate 1.34 times more return on investment than Bookook Steel. However, Koh Young is 1.34 times more volatile than Bookook Steel. It trades about 0.14 of its potential returns per unit of risk. Bookook Steel is currently generating about 0.15 per unit of risk. If you would invest 852,000 in Koh Young Technology on October 19, 2024 and sell it today you would earn a total of 65,000 from holding Koh Young Technology or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. Bookook Steel
Performance |
| Timeline |
| Koh Young Technology |
| Bookook Steel |
Koh Young and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Bookook Steel
The main advantage of trading using opposite Koh Young and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Bookook 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 Bookook Steel will offset losses from the drop in Bookook Steel's long position.The idea behind Koh Young Technology and Bookook Steel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bookook Steel vs. BIT Computer Co | Bookook Steel vs. Koh Young Technology | Bookook Steel vs. SBI Investment KOREA | Bookook Steel vs. AeroSpace Technology of |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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