Correlation Between DONGKUK STEEL and Doosan Heavy
Can any of the company-specific risk be diversified away by investing in both DONGKUK STEEL and Doosan Heavy 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 Doosan Heavy 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 Doosan Heavy Ind, you can compare the effects of market volatilities on DONGKUK STEEL and Doosan Heavy 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 Doosan Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK STEEL and Doosan Heavy.
Diversification Opportunities for DONGKUK STEEL and Doosan Heavy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between DONGKUK and Doosan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK STEEL MILL and Doosan Heavy Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Heavy Ind 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 Doosan Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Heavy Ind has no effect on the direction of DONGKUK STEEL i.e., DONGKUK STEEL and Doosan Heavy go up and down completely randomly.
Pair Corralation between DONGKUK STEEL and Doosan Heavy
Assuming the 90 days trading horizon DONGKUK STEEL MILL is expected to generate 0.75 times more return on investment than Doosan Heavy. However, DONGKUK STEEL MILL is 1.33 times less risky than Doosan Heavy. It trades about -0.03 of its potential returns per unit of risk. Doosan Heavy Ind is currently generating about -0.21 per unit of risk. If you would invest 853,000 in DONGKUK STEEL MILL on September 12, 2024 and sell it today you would lose (22,000) from holding DONGKUK STEEL MILL or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK STEEL MILL vs. Doosan Heavy Ind
Performance |
| Timeline |
| DONGKUK STEEL MILL |
| Doosan Heavy Ind |
DONGKUK STEEL and Doosan Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK STEEL and Doosan Heavy
The main advantage of trading using opposite DONGKUK STEEL and Doosan Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK STEEL position performs unexpectedly, Doosan Heavy 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 Doosan Heavy will offset losses from the drop in Doosan Heavy's long position.| DONGKUK STEEL vs. Genie Music | DONGKUK STEEL vs. Clean Science co | DONGKUK STEEL vs. Shinsegae Food | DONGKUK STEEL vs. Samlip General Foods |
| Doosan Heavy vs. Histeel | Doosan Heavy vs. Alton Sports CoLtd | Doosan Heavy vs. Hankuk Steel Wire | Doosan Heavy vs. Samhyun Steel 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |