Correlation Between Daido Steel and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both Daido Steel and GAMING FAC 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 Daido Steel and GAMING FAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daido Steel Co and GAMING FAC SA, you can compare the effects of market volatilities on Daido Steel and GAMING FAC 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 Daido Steel with a short position of GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daido Steel and GAMING FAC.
Diversification Opportunities for Daido Steel and GAMING FAC
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daido and GAMING is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Daido Steel Co and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA and Daido 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 Daido Steel Co are associated (or correlated) with GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of Daido Steel i.e., Daido Steel and GAMING FAC go up and down completely randomly.
Pair Corralation between Daido Steel and GAMING FAC
Assuming the 90 days horizon Daido Steel is expected to generate 8.69 times less return on investment than GAMING FAC. But when comparing it to its historical volatility, Daido Steel Co is 4.12 times less risky than GAMING FAC. It trades about 0.11 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 161.00 in GAMING FAC SA on November 1, 2024 and sell it today you would earn a total of 30.00 from holding GAMING FAC SA or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daido Steel Co vs. GAMING FAC SA
Performance |
| Timeline |
| Daido Steel |
| GAMING FAC SA |
Daido Steel and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daido Steel and GAMING FAC
The main advantage of trading using opposite Daido Steel and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daido Steel position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.| Daido Steel vs. Nucor | Daido Steel vs. ArcelorMittal SA | Daido Steel vs. ArcelorMittal | Daido Steel vs. Steel Dynamics |
| GAMING FAC vs. PKSHA TECHNOLOGY INC | GAMING FAC vs. Daido Steel Co | GAMING FAC vs. ANGANG STEEL H | GAMING FAC vs. Insteel Industries |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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