Correlation Between DC Media and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both DC Media and Samhyun 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 DC Media and Samhyun Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DC Media Co and Samhyun Steel Co, you can compare the effects of market volatilities on DC Media and Samhyun 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 DC Media with a short position of Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and Samhyun Steel.
Diversification Opportunities for DC Media and Samhyun Steel
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 263720 and Samhyun is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel and DC Media 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 DC Media Co are associated (or correlated) with Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of DC Media i.e., DC Media and Samhyun Steel go up and down completely randomly.
Pair Corralation between DC Media and Samhyun Steel
Assuming the 90 days trading horizon DC Media Co is expected to generate 1.22 times more return on investment than Samhyun Steel. However, DC Media is 1.22 times more volatile than Samhyun Steel Co. It trades about 0.19 of its potential returns per unit of risk. Samhyun Steel Co is currently generating about 0.22 per unit of risk. If you would invest 1,781,000 in DC Media Co on December 4, 2024 and sell it today you would earn a total of 92,000 from holding DC Media Co or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media Co vs. Samhyun Steel Co
Performance |
| Timeline |
| DC Media |
| Samhyun Steel |
DC Media and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and Samhyun Steel
The main advantage of trading using opposite DC Media and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, Samhyun 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.| DC Media vs. Samsung Electronics Co | DC Media vs. Alton Sports CoLtd | DC Media vs. Samji Electronics Co | DC Media vs. BGF Retail Co |
| Samhyun Steel vs. Seohee Construction Co | Samhyun Steel vs. Korean Air Lines | Samhyun Steel vs. Miwon Chemicals Co | Samhyun Steel vs. Kukdong Oil Chemicals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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