Correlation Between TOPMATERIAL and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL 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 TOPMATERIAL and Daehan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Daehan Steel, you can compare the effects of market volatilities on TOPMATERIAL 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 TOPMATERIAL with a short position of Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Daehan Steel.
Diversification Opportunities for TOPMATERIAL and Daehan Steel
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TOPMATERIAL and Daehan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel and TOPMATERIAL 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 TOPMATERIAL LTD 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 TOPMATERIAL i.e., TOPMATERIAL and Daehan Steel go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Daehan Steel
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to under-perform the Daehan Steel. In addition to that, TOPMATERIAL is 1.24 times more volatile than Daehan Steel. It trades about -0.2 of its total potential returns per unit of risk. Daehan Steel is currently generating about 0.27 per unit of volatility. If you would invest 1,332,000 in Daehan Steel on August 31, 2024 and sell it today you would earn a total of 224,000 from holding Daehan Steel or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Daehan Steel
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Daehan Steel |
TOPMATERIAL and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Daehan Steel
The main advantage of trading using opposite TOPMATERIAL and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL 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.| TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. LG Energy Solution | TOPMATERIAL vs. SK Hynix |
| Daehan Steel vs. Woori Technology Investment | Daehan Steel vs. Stic Investments | Daehan Steel vs. Hansol Homedeco Co | Daehan Steel vs. Lotte Chilsung Beverage |
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.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |