Correlation Between ANGANG STEEL and KOBE STEEL
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and KOBE 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 ANGANG STEEL and KOBE STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and KOBE STEEL LTD, you can compare the effects of market volatilities on ANGANG STEEL and KOBE 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 ANGANG STEEL with a short position of KOBE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and KOBE STEEL.
Diversification Opportunities for ANGANG STEEL and KOBE STEEL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGANG and KOBE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and KOBE STEEL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOBE STEEL LTD and ANGANG 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 ANGANG STEEL H are associated (or correlated) with KOBE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOBE STEEL LTD has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and KOBE STEEL go up and down completely randomly.
Pair Corralation between ANGANG STEEL and KOBE STEEL
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 2.62 times more return on investment than KOBE STEEL. However, ANGANG STEEL is 2.62 times more volatile than KOBE STEEL LTD. It trades about 0.11 of its potential returns per unit of risk. KOBE STEEL LTD is currently generating about -0.02 per unit of risk. If you would invest 12.00 in ANGANG STEEL H on November 2, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. KOBE STEEL LTD
Performance |
| Timeline |
| ANGANG STEEL H |
| KOBE STEEL LTD |
ANGANG STEEL and KOBE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and KOBE STEEL
The main advantage of trading using opposite ANGANG STEEL and KOBE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, KOBE 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 KOBE STEEL will offset losses from the drop in KOBE STEEL's long position.| ANGANG STEEL vs. THORNEY TECHS LTD | ANGANG STEEL vs. Tradegate AG Wertpapierhandelsbank | ANGANG STEEL vs. GLG LIFE TECH | ANGANG STEEL vs. VELA TECHNOLPLC LS 0001 |
| KOBE STEEL vs. Molson Coors Beverage | KOBE STEEL vs. BOSTON BEER A | KOBE STEEL vs. ASPEN TECHINC DL | KOBE STEEL vs. PKSHA TECHNOLOGY INC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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