Correlation Between Samhyun Steel and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel and Jeong Moon 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 Samhyun Steel and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhyun Steel Co and Jeong Moon Information, you can compare the effects of market volatilities on Samhyun Steel and Jeong Moon 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 Samhyun Steel with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and Jeong Moon.
Diversification Opportunities for Samhyun Steel and Jeong Moon
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samhyun and Jeong is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Samhyun 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 Samhyun Steel Co are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and Jeong Moon go up and down completely randomly.
Pair Corralation between Samhyun Steel and Jeong Moon
Assuming the 90 days trading horizon Samhyun Steel Co is expected to generate 0.47 times more return on investment than Jeong Moon. However, Samhyun Steel Co is 2.13 times less risky than Jeong Moon. It trades about 0.06 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.14 per unit of risk. If you would invest 468,000 in Samhyun Steel Co on September 26, 2024 and sell it today you would earn a total of 8,000 from holding Samhyun Steel Co or generate 1.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samhyun Steel Co vs. Jeong Moon Information
Performance |
Timeline |
Samhyun Steel |
Jeong Moon Information |
Samhyun Steel and Jeong Moon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samhyun Steel and Jeong Moon
The main advantage of trading using opposite Samhyun Steel and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. Tplex Co | Samhyun Steel vs. PJ Metal Co | Samhyun Steel vs. Gyeongnam Steel Co |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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