Correlation Between Kg Chemical and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Kg Chemical and Dongil Metal 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 Kg Chemical and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kg Chemical and Dongil Metal Co, you can compare the effects of market volatilities on Kg Chemical and Dongil Metal 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 Kg Chemical with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kg Chemical and Dongil Metal.
Diversification Opportunities for Kg Chemical and Dongil Metal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 001390 and Dongil is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kg Chemical and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Kg Chemical 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 Kg Chemical are associated (or correlated) with Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Kg Chemical i.e., Kg Chemical and Dongil Metal go up and down completely randomly.
Pair Corralation between Kg Chemical and Dongil Metal
Assuming the 90 days trading horizon Kg Chemical is expected to generate 1.51 times more return on investment than Dongil Metal. However, Kg Chemical is 1.51 times more volatile than Dongil Metal Co. It trades about 0.0 of its potential returns per unit of risk. Dongil Metal Co is currently generating about -0.08 per unit of risk. If you would invest 481,934 in Kg Chemical on November 9, 2024 and sell it today you would lose (109,934) from holding Kg Chemical or give up 22.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Kg Chemical vs. Dongil Metal Co
Performance |
| Timeline |
| Kg Chemical |
| Dongil Metal |
Kg Chemical and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kg Chemical and Dongil Metal
The main advantage of trading using opposite Kg Chemical and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kg Chemical position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Kg Chemical vs. Soulbrain Holdings Co | Kg Chemical vs. Wonik Ips Co | Kg Chemical vs. TES Co | Kg Chemical vs. Dongjin Semichem Co |
| Dongil Metal vs. Soulbrain Holdings Co | Dongil Metal vs. Wonik Ips Co | Dongil Metal vs. TES Co | Dongil Metal vs. Dongjin Semichem 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 CEOs Directory module to screen CEOs from public companies around the world.
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