Correlation Between Visa and DONGKUK STEEL
Can any of the company-specific risk be diversified away by investing in both Visa and DONGKUK 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 Visa and DONGKUK STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and DONGKUK STEEL MILL, you can compare the effects of market volatilities on Visa and DONGKUK 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 Visa with a short position of DONGKUK STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and DONGKUK STEEL.
Diversification Opportunities for Visa and DONGKUK STEEL
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and DONGKUK is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and DONGKUK STEEL MILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK STEEL MILL and Visa 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 Visa Class A are associated (or correlated) with DONGKUK STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK STEEL MILL has no effect on the direction of Visa i.e., Visa and DONGKUK STEEL go up and down completely randomly.
Pair Corralation between Visa and DONGKUK STEEL
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.58 times more return on investment than DONGKUK STEEL. However, Visa Class A is 1.72 times less risky than DONGKUK STEEL. It trades about 0.35 of its potential returns per unit of risk. DONGKUK STEEL MILL is currently generating about -0.08 per unit of risk. If you would invest 28,929 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 2,579 from holding Visa Class A or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Visa Class A vs. DONGKUK STEEL MILL
Performance |
| Timeline |
| Visa Class A |
| DONGKUK STEEL MILL |
Visa and DONGKUK STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and DONGKUK STEEL
The main advantage of trading using opposite Visa and DONGKUK STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, DONGKUK 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 DONGKUK STEEL will offset losses from the drop in DONGKUK STEEL's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| DONGKUK STEEL vs. FNC Entertainment Co | DONGKUK STEEL vs. Next Entertainment World | DONGKUK STEEL vs. Nice Information Telecommunication | DONGKUK STEEL vs. SKONEC Entertainment 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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