Correlation Between Baker Steel and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Baker Steel and Weiss Korea 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 Baker Steel and Weiss Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and Weiss Korea Opportunity, you can compare the effects of market volatilities on Baker Steel and Weiss Korea 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 Baker Steel with a short position of Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Weiss Korea.
Diversification Opportunities for Baker Steel and Weiss Korea
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baker and Weiss is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity and Baker 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 Baker Steel Resources are associated (or correlated) with Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Baker Steel i.e., Baker Steel and Weiss Korea go up and down completely randomly.
Pair Corralation between Baker Steel and Weiss Korea
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 2.62 times more return on investment than Weiss Korea. However, Baker Steel is 2.62 times more volatile than Weiss Korea Opportunity. It trades about 0.03 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about 0.01 per unit of risk. If you would invest 4,650 in Baker Steel Resources on November 27, 2024 and sell it today you would earn a total of 700.00 from holding Baker Steel Resources or generate 15.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Steel Resources vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Baker Steel Resources |
| Weiss Korea Opportunity |
Baker Steel and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and Weiss Korea
The main advantage of trading using opposite Baker Steel and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Baker Steel vs. Atalaya Mining | Baker Steel vs. Central Asia Metals | Baker Steel vs. Wheaton Precious Metals | Baker Steel vs. Lindsell Train Investment |
| Weiss Korea vs. Atalaya Mining | Weiss Korea vs. Indutrade AB | Weiss Korea vs. Flow Traders NV | Weiss Korea vs. AfriTin Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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