Correlation Between DONGKUK STEEL and Korea Investment
Can any of the company-specific risk be diversified away by investing in both DONGKUK STEEL and Korea Investment 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 Korea Investment 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 Korea Investment Holdings, you can compare the effects of market volatilities on DONGKUK STEEL and Korea Investment 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK STEEL and Korea Investment.
Diversification Opportunities for DONGKUK STEEL and Korea Investment
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DONGKUK and Korea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK STEEL MILL and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of DONGKUK STEEL i.e., DONGKUK STEEL and Korea Investment go up and down completely randomly.
Pair Corralation between DONGKUK STEEL and Korea Investment
Assuming the 90 days trading horizon DONGKUK STEEL is expected to generate 177.61 times less return on investment than Korea Investment. In addition to that, DONGKUK STEEL is 1.85 times more volatile than Korea Investment Holdings. It trades about 0.0 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.28 per unit of volatility. If you would invest 5,350,000 in Korea Investment Holdings on November 7, 2024 and sell it today you would earn a total of 310,000 from holding Korea Investment Holdings or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK STEEL MILL vs. Korea Investment Holdings
Performance |
| Timeline |
| DONGKUK STEEL MILL |
| Korea Investment Holdings |
DONGKUK STEEL and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK STEEL and Korea Investment
The main advantage of trading using opposite DONGKUK STEEL and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK STEEL position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment'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 |
| Korea Investment vs. Neungyule Education | Korea Investment vs. Fine Besteel Co | Korea Investment vs. GS Retail Co | Korea Investment vs. Jeju Beer 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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