Correlation Between SH Energy and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both SH Energy and Duksan Hi 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 SH Energy and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Duksan Hi Metal, you can compare the effects of market volatilities on SH Energy and Duksan Hi 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 SH Energy with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Duksan Hi.
Diversification Opportunities for SH Energy and Duksan Hi
Average diversification
The 3 months correlation between 002360 and Duksan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal and SH Energy 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 SH Energy Chemical are associated (or correlated) with Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of SH Energy i.e., SH Energy and Duksan Hi go up and down completely randomly.
Pair Corralation between SH Energy and Duksan Hi
Assuming the 90 days trading horizon SH Energy is expected to generate 2.88 times less return on investment than Duksan Hi. But when comparing it to its historical volatility, SH Energy Chemical is 1.13 times less risky than Duksan Hi. It trades about 0.17 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 341,500 in Duksan Hi Metal on October 11, 2024 and sell it today you would earn a total of 78,000 from holding Duksan Hi Metal or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Duksan Hi Metal
Performance |
| Timeline |
| SH Energy Chemical |
| Duksan Hi Metal |
SH Energy and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Duksan Hi
The main advantage of trading using opposite SH Energy and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| SH Energy vs. Handok Clean Tech | SH Energy vs. Samsung Life Insurance | SH Energy vs. InnoTherapy | SH Energy vs. INFINITT Healthcare Co |
| Duksan Hi vs. Jeju Bank | Duksan Hi vs. Adaptive Plasma Technology | Duksan Hi vs. Korea Shipbuilding Offshore | Duksan Hi vs. InfoBank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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