Correlation Between Finebesteel and DONGKUK STEEL
Can any of the company-specific risk be diversified away by investing in both Finebesteel and DONGKUK 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 Finebesteel and DONGKUK STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and DONGKUK STEEL MILL, you can compare the effects of market volatilities on Finebesteel and DONGKUK 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 Finebesteel with a short position of DONGKUK STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and DONGKUK STEEL.
Diversification Opportunities for Finebesteel and DONGKUK STEEL
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and DONGKUK is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and DONGKUK STEEL MILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK STEEL MILL and Finebesteel 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 Finebesteel are associated (or correlated) with DONGKUK STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK STEEL MILL has no effect on the direction of Finebesteel i.e., Finebesteel and DONGKUK STEEL go up and down completely randomly.
Pair Corralation between Finebesteel and DONGKUK STEEL
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the DONGKUK STEEL. In addition to that, Finebesteel is 1.2 times more volatile than DONGKUK STEEL MILL. It trades about -0.02 of its total potential returns per unit of risk. DONGKUK STEEL MILL is currently generating about 0.02 per unit of volatility. If you would invest 878,710 in DONGKUK STEEL MILL on January 28, 2025 and sell it today you would earn a total of 50,290 from holding DONGKUK STEEL MILL or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. DONGKUK STEEL MILL
Performance |
| Timeline |
| Finebesteel |
| DONGKUK STEEL MILL |
Finebesteel and DONGKUK STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and DONGKUK STEEL
The main advantage of trading using opposite Finebesteel and DONGKUK STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, DONGKUK 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 DONGKUK STEEL will offset losses from the drop in DONGKUK STEEL's long position.| Finebesteel vs. Mobileleader CoLtd | Finebesteel vs. Samlip General Foods | Finebesteel vs. Nable Communications | Finebesteel vs. Automobile Pc |
| DONGKUK STEEL vs. Innowireless Co | DONGKUK STEEL vs. Dongil Metal Co | DONGKUK STEEL vs. Daiyang Metal Co | DONGKUK STEEL vs. LG Household Healthcare |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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