Correlation Between DONGKUK STEEL and FnGuide
Can any of the company-specific risk be diversified away by investing in both DONGKUK STEEL and FnGuide 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 FnGuide 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 FnGuide, you can compare the effects of market volatilities on DONGKUK STEEL and FnGuide 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 FnGuide. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK STEEL and FnGuide.
Diversification Opportunities for DONGKUK STEEL and FnGuide
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between DONGKUK and FnGuide is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK STEEL MILL and FnGuide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FnGuide 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 FnGuide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FnGuide has no effect on the direction of DONGKUK STEEL i.e., DONGKUK STEEL and FnGuide go up and down completely randomly.
Pair Corralation between DONGKUK STEEL and FnGuide
Assuming the 90 days trading horizon DONGKUK STEEL is expected to generate 11.09 times less return on investment than FnGuide. But when comparing it to its historical volatility, DONGKUK STEEL MILL is 4.27 times less risky than FnGuide. It trades about 0.01 of its potential returns per unit of risk. FnGuide is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 969,000 in FnGuide on August 29, 2024 and sell it today you would lose (164,000) from holding FnGuide or give up 16.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
DONGKUK STEEL MILL vs. FnGuide
Performance |
| Timeline |
| DONGKUK STEEL MILL |
| FnGuide |
DONGKUK STEEL and FnGuide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK STEEL and FnGuide
The main advantage of trading using opposite DONGKUK STEEL and FnGuide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK STEEL position performs unexpectedly, FnGuide 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 FnGuide will offset losses from the drop in FnGuide's long position.| DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. Samsung Electronics Co | DONGKUK STEEL vs. LG Energy Solution | DONGKUK STEEL vs. SK Hynix |
| FnGuide vs. InnoTherapy | FnGuide vs. Taeyang Metal Industrial | FnGuide vs. Daiyang Metal Co | FnGuide vs. Hyunwoo Industrial 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.
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