Correlation Between Daelim Trading and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Kumho Petro 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 Daelim Trading and Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Kumho Petro Chemical, you can compare the effects of market volatilities on Daelim Trading and Kumho Petro 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 Daelim Trading with a short position of Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Kumho Petro.
Diversification Opportunities for Daelim Trading and Kumho Petro
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daelim and Kumho is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Daelim Trading i.e., Daelim Trading and Kumho Petro go up and down completely randomly.
Pair Corralation between Daelim Trading and Kumho Petro
Assuming the 90 days trading horizon Daelim Trading Co is expected to generate 1.18 times more return on investment than Kumho Petro. However, Daelim Trading is 1.18 times more volatile than Kumho Petro Chemical. It trades about -0.18 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about -0.24 per unit of risk. If you would invest 289,000 in Daelim Trading Co on September 12, 2024 and sell it today you would lose (27,500) from holding Daelim Trading Co or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Kumho Petro Chemical
Performance |
| Timeline |
| Daelim Trading |
| Kumho Petro Chemical |
Daelim Trading and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Kumho Petro
The main advantage of trading using opposite Daelim Trading and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. SK Hynix | Daelim Trading vs. POSCO Holdings |
| Kumho Petro vs. Seoul Electronics Telecom | Kumho Petro vs. SK Chemicals Co | Kumho Petro vs. Kisan Telecom Co | Kumho Petro vs. BIT Computer 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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