Correlation Between DONGKUK STEEL and Seah Steel
Can any of the company-specific risk be diversified away by investing in both DONGKUK STEEL and Seah 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 DONGKUK STEEL and Seah Steel 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 Seah Steel Corp, you can compare the effects of market volatilities on DONGKUK STEEL and Seah 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 DONGKUK STEEL with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK STEEL and Seah Steel.
Diversification Opportunities for DONGKUK STEEL and Seah Steel
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DONGKUK and Seah is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK STEEL MILL and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp 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 Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of DONGKUK STEEL i.e., DONGKUK STEEL and Seah Steel go up and down completely randomly.
Pair Corralation between DONGKUK STEEL and Seah Steel
Assuming the 90 days trading horizon DONGKUK STEEL MILL is expected to under-perform the Seah Steel. In addition to that, DONGKUK STEEL is 2.11 times more volatile than Seah Steel Corp. It trades about -0.03 of its total potential returns per unit of risk. Seah Steel Corp is currently generating about -0.03 per unit of volatility. If you would invest 14,630,000 in Seah Steel Corp on August 29, 2024 and sell it today you would lose (2,790,000) from holding Seah Steel Corp or give up 19.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.91% |
| Values | Daily Returns |
DONGKUK STEEL MILL vs. Seah Steel Corp
Performance |
| Timeline |
| DONGKUK STEEL MILL |
| Seah Steel Corp |
DONGKUK STEEL and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK STEEL and Seah Steel
The main advantage of trading using opposite DONGKUK STEEL and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK STEEL position performs unexpectedly, Seah 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 Seah Steel will offset losses from the drop in Seah Steel'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 |
| Seah Steel vs. Cuckoo Electronics Co | Seah Steel vs. KyungIn Electronics Co | Seah Steel vs. Genie Music | Seah Steel vs. Duksan Hi Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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