Correlation Between Korea Steel and MediaZen
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
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 Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Steel Co vs. MediaZen
Performance |
Timeline |
Korea Steel |
MediaZen |
Korea Steel and MediaZen Volatility Contrast
Predicted Return Density |
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.Korea Steel vs. Worldex Industry Trading | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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