Correlation Between Raontech and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both Raontech 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 Raontech and Samhyun Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and Samhyun Steel Co, you can compare the effects of market volatilities on Raontech 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 Raontech with a short position of Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and Samhyun Steel.
Diversification Opportunities for Raontech and Samhyun Steel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raontech and Samhyun is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel and Raontech 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 Raontech 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 Raontech i.e., Raontech and Samhyun Steel go up and down completely randomly.
Pair Corralation between Raontech and Samhyun Steel
Assuming the 90 days trading horizon Raontech is expected to generate 3.37 times more return on investment than Samhyun Steel. However, Raontech is 3.37 times more volatile than Samhyun Steel Co. It trades about 0.43 of its potential returns per unit of risk. Samhyun Steel Co is currently generating about 0.19 per unit of risk. If you would invest 270,000 in Raontech on October 12, 2024 and sell it today you would earn a total of 106,500 from holding Raontech or generate 39.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. Samhyun Steel Co
Performance |
| Timeline |
| Raontech |
| Samhyun Steel |
Raontech and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and Samhyun Steel
The main advantage of trading using opposite Raontech and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech 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.| Raontech vs. Samlip General Foods | Raontech vs. Daol Investment Securities | Raontech vs. Atinum Investment Co | Raontech vs. JYP Entertainment Corp |
| Samhyun Steel vs. Orbitech Co | Samhyun Steel vs. Ssangyong Information Communication | Samhyun Steel vs. Innowireless Co | Samhyun Steel vs. Raontech |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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