Correlation Between Dongjin Semichem and Wonik QnC
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem and Wonik QnC 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 Wonik QnC 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 Wonik QnC, you can compare the effects of market volatilities on Dongjin Semichem and Wonik QnC 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 Wonik QnC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and Wonik QnC.
Diversification Opportunities for Dongjin Semichem and Wonik QnC
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjin and Wonik is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem Co and Wonik QnC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik QnC 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 Wonik QnC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik QnC has no effect on the direction of Dongjin Semichem i.e., Dongjin Semichem and Wonik QnC go up and down completely randomly.
Pair Corralation between Dongjin Semichem and Wonik QnC
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to generate 1.14 times more return on investment than Wonik QnC. However, Dongjin Semichem is 1.14 times more volatile than Wonik QnC. It trades about -0.1 of its potential returns per unit of risk. Wonik QnC is currently generating about -0.26 per unit of risk. If you would invest 2,670,000 in Dongjin Semichem Co on August 25, 2024 and sell it today you would lose (215,000) from holding Dongjin Semichem Co or give up 8.05% 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. Wonik QnC
Performance |
| Timeline |
| Dongjin Semichem |
| Wonik QnC |
Dongjin Semichem and Wonik QnC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and Wonik QnC
The main advantage of trading using opposite Dongjin Semichem and Wonik QnC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem position performs unexpectedly, Wonik QnC 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 Wonik QnC will offset losses from the drop in Wonik QnC's long position.| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. POSCO Holdings | Dongjin Semichem vs. Lotte Chemical Corp | Dongjin Semichem vs. Hyundai Steel |
| Wonik QnC vs. Korea Information Communications | Wonik QnC vs. KIWI Media Group | Wonik QnC vs. BGF Retail Co | Wonik QnC vs. Daishin Information Communications |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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