Correlation Between Dongjin Semichem and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem and SFA Semicon 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 Dongjin Semichem and SFA Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and SFA Semicon Co, you can compare the effects of market volatilities on Dongjin Semichem and SFA Semicon 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 Dongjin Semichem with a short position of SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and SFA Semicon.
Diversification Opportunities for Dongjin Semichem and SFA Semicon
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjin and SFA is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem Co and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon and Dongjin Semichem 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 Dongjin Semichem Co are associated (or correlated) with SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of Dongjin Semichem i.e., Dongjin Semichem and SFA Semicon go up and down completely randomly.
Pair Corralation between Dongjin Semichem and SFA Semicon
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to generate 1.18 times more return on investment than SFA Semicon. However, Dongjin Semichem is 1.18 times more volatile than SFA Semicon Co. It trades about -0.06 of its potential returns per unit of risk. SFA Semicon Co is currently generating about -0.11 per unit of risk. If you would invest 3,830,000 in Dongjin Semichem Co on August 29, 2024 and sell it today you would lose (1,460,000) from holding Dongjin Semichem Co or give up 38.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. SFA Semicon Co
Performance |
| Timeline |
| Dongjin Semichem |
| SFA Semicon |
Dongjin Semichem and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and SFA Semicon
The main advantage of trading using opposite Dongjin Semichem and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon's long position.| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem vs. LF Co |
| SFA Semicon vs. SFA Engineering | SFA Semicon vs. Nepes | SFA Semicon vs. LEENO Industrial | SFA Semicon vs. Seoul Semiconductor 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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