Correlation Between Bukwang Pharm and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both Bukwang Pharm and Daiyang 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 Bukwang Pharm and Daiyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bukwang Pharm and Daiyang Metal Co, you can compare the effects of market volatilities on Bukwang Pharm and Daiyang 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 Bukwang Pharm with a short position of Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukwang Pharm and Daiyang Metal.
Diversification Opportunities for Bukwang Pharm and Daiyang Metal
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bukwang and Daiyang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bukwang Pharm and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal and Bukwang Pharm 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 Bukwang Pharm are associated (or correlated) with Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of Bukwang Pharm i.e., Bukwang Pharm and Daiyang Metal go up and down completely randomly.
Pair Corralation between Bukwang Pharm and Daiyang Metal
Assuming the 90 days trading horizon Bukwang Pharm is expected to generate 0.69 times more return on investment than Daiyang Metal. However, Bukwang Pharm is 1.45 times less risky than Daiyang Metal. It trades about -0.05 of its potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.11 per unit of risk. If you would invest 482,500 in Bukwang Pharm on September 2, 2024 and sell it today you would lose (12,500) from holding Bukwang Pharm or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bukwang Pharm vs. Daiyang Metal Co
Performance |
| Timeline |
| Bukwang Pharm |
| Daiyang Metal |
Bukwang Pharm and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bukwang Pharm and Daiyang Metal
The main advantage of trading using opposite Bukwang Pharm and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukwang Pharm position performs unexpectedly, Daiyang 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| Bukwang Pharm vs. Samyung Trading Co | Bukwang Pharm vs. Daiyang Metal Co | Bukwang Pharm vs. E Investment Development | Bukwang Pharm vs. DONGKUK TED METAL |
| Daiyang Metal vs. AptaBio Therapeutics | Daiyang Metal vs. Daewoo SBI SPAC | Daiyang Metal vs. Dream Security co | Daiyang Metal vs. Microfriend |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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