Correlation Between DSC Investment and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Daehan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Daehan Steel, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Daehan Steel.
Diversification Opportunities for DSC Investment and Daehan Steel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DSC and Daehan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel and DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Daehan Steel go up and down completely randomly.
Pair Corralation between DSC Investment and Daehan Steel
Assuming the 90 days trading horizon DSC Investment is expected to under-perform the Daehan Steel. In addition to that, DSC Investment is 1.18 times more volatile than Daehan Steel. It trades about -0.06 of its total potential returns per unit of risk. Daehan Steel is currently generating about 0.09 per unit of volatility. If you would invest 1,281,000 in Daehan Steel on October 13, 2024 and sell it today you would earn a total of 315,000 from holding Daehan Steel or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Daehan Steel
Performance |
| Timeline |
| DSC Investment |
| Daehan Steel |
DSC Investment and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Daehan Steel
The main advantage of trading using opposite DSC Investment and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. KB Financial Group | DSC Investment vs. Incar Financial Service | DSC Investment vs. Hanjin Transportation Co | DSC Investment vs. Woori Financial Group |
| Daehan Steel vs. DSC Investment | Daehan Steel vs. KTB Investment Securities | Daehan Steel vs. E Investment Development | Daehan Steel vs. ENF Technology 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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