Correlation Between Daechang Steel and 122830
Can any of the company-specific risk be diversified away by investing in both Daechang Steel and 122830 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 Daechang Steel and 122830 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daechang Steel Co and 122830, you can compare the effects of market volatilities on Daechang Steel and 122830 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 Daechang Steel with a short position of 122830. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daechang Steel and 122830.
Diversification Opportunities for Daechang Steel and 122830
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daechang and 122830 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Daechang Steel Co and 122830 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 122830 and Daechang 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 Daechang Steel Co are associated (or correlated) with 122830. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 122830 has no effect on the direction of Daechang Steel i.e., Daechang Steel and 122830 go up and down completely randomly.
Pair Corralation between Daechang Steel and 122830
Assuming the 90 days trading horizon Daechang Steel is expected to generate 3.93 times less return on investment than 122830. But when comparing it to its historical volatility, Daechang Steel Co is 3.69 times less risky than 122830. It trades about 0.02 of its potential returns per unit of risk. 122830 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 159,900 in 122830 on August 30, 2024 and sell it today you would lose (4,700) from holding 122830 or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daechang Steel Co vs. 122830
Performance |
| Timeline |
| Daechang Steel |
| 122830 |
Daechang Steel and 122830 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daechang Steel and 122830
The main advantage of trading using opposite Daechang Steel and 122830 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daechang Steel position performs unexpectedly, 122830 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 122830 will offset losses from the drop in 122830's long position.| Daechang Steel vs. Hanwha Solutions | Daechang Steel vs. Lotte Chemical Corp | Daechang Steel vs. Hyundai Steel | Daechang Steel vs. Ecopro Co |
| 122830 vs. LS Materials | 122830 vs. Ecoplastic | 122830 vs. INNOX Advanced Materials | 122830 vs. Daejoo Electronic Materials |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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