Correlation Between DONGKUK STEEL and GS Retail
Can any of the company-specific risk be diversified away by investing in both DONGKUK STEEL and GS Retail 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 DONGKUK STEEL and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK STEEL MILL and GS Retail Co, you can compare the effects of market volatilities on DONGKUK STEEL and GS Retail 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 DONGKUK STEEL with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK STEEL and GS Retail.
Diversification Opportunities for DONGKUK STEEL and GS Retail
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between DONGKUK and 007070 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK STEEL MILL and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and DONGKUK 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 DONGKUK STEEL MILL are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of DONGKUK STEEL i.e., DONGKUK STEEL and GS Retail go up and down completely randomly.
Pair Corralation between DONGKUK STEEL and GS Retail
Assuming the 90 days trading horizon DONGKUK STEEL MILL is expected to generate 1.69 times more return on investment than GS Retail. However, DONGKUK STEEL is 1.69 times more volatile than GS Retail Co. It trades about 0.0 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.54 per unit of risk. If you would invest 823,000 in DONGKUK STEEL MILL on November 7, 2024 and sell it today you would lose (3,000) from holding DONGKUK STEEL MILL or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DONGKUK STEEL MILL vs. GS Retail Co
Performance |
| Timeline |
| DONGKUK STEEL MILL |
| GS Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DONGKUK STEEL and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK STEEL and GS Retail
The main advantage of trading using opposite DONGKUK STEEL and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK STEEL position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. SK Hynix | DONGKUK STEEL vs. LG Chem | DONGKUK STEEL vs. Samsung SDI |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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