Correlation Between Korea Steel and MediaZen

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Can any of the company-specific risk be diversified away by investing in both Korea Steel and MediaZen 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 Korea Steel and MediaZen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Steel Co and MediaZen, you can compare the effects of market volatilities on Korea Steel and MediaZen 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 Korea Steel with a short position of MediaZen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Steel and MediaZen.

Diversification Opportunities for Korea Steel and MediaZen

KoreaMediaZenDiversified AwayKoreaMediaZenDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Korea and MediaZen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Korea Steel Co and MediaZen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaZen and Korea 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 Korea Steel Co are associated (or correlated) with MediaZen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaZen has no effect on the direction of Korea Steel i.e., Korea Steel and MediaZen go up and down completely randomly.

Pair Corralation between Korea Steel and MediaZen

Assuming the 90 days trading horizon Korea Steel Co is expected to under-perform the MediaZen. But the stock apears to be less risky and, when comparing its historical volatility, Korea Steel Co is 1.83 times less risky than MediaZen. The stock trades about -0.02 of its potential returns per unit of risk. The MediaZen is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,366,000  in MediaZen on November 21, 2024 and sell it today you would lose (236,000) from holding MediaZen or give up 17.28% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Korea Steel Co  vs.  MediaZen

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50
JavaScript chart by amCharts 3.21.15007280 279600
       Timeline  
Korea Steel 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Korea Steel Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Korea Steel sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1,3001,4001,5001,6001,700
MediaZen 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MediaZen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MediaZen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11,50012,00012,500

Korea Steel and MediaZen Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.7-5.02-3.34-1.650.02971.783.575.357.13 0.020.040.060.08
JavaScript chart by amCharts 3.21.15007280 279600
       Returns  

Pair Trading with Korea Steel and MediaZen

The main advantage of trading using opposite Korea Steel and MediaZen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Steel position performs unexpectedly, MediaZen 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 MediaZen will offset losses from the drop in MediaZen's long position.
The idea behind Korea Steel Co and MediaZen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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