Correlation Between Hannong Chemicals and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals 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 Hannong Chemicals and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Duksan Hi Metal, you can compare the effects of market volatilities on Hannong Chemicals 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 Hannong Chemicals with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Duksan Hi.
Diversification Opportunities for Hannong Chemicals and Duksan Hi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hannong and Duksan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals i.e., Hannong Chemicals and Duksan Hi go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Duksan Hi
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 1.61 times more return on investment than Duksan Hi. However, Hannong Chemicals is 1.61 times more volatile than Duksan Hi Metal. It trades about 0.03 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.08 per unit of risk. If you would invest 1,332,874 in Hannong Chemicals on October 26, 2024 and sell it today you would earn a total of 39,126 from holding Hannong Chemicals or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Duksan Hi Metal
Performance |
| Timeline |
| Hannong Chemicals |
| Duksan Hi Metal |
Hannong Chemicals and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Duksan Hi
The main advantage of trading using opposite Hannong Chemicals and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals 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.| Hannong Chemicals vs. KB Financial Group | Hannong Chemicals vs. Shinhan Financial Group | Hannong Chemicals vs. Hana Financial | Hannong Chemicals vs. Woori Financial Group |
| Duksan Hi vs. Hannong Chemicals | Duksan Hi vs. SK Chemicals Co | Duksan Hi vs. Dongil Metal Co | Duksan Hi vs. Miwon Chemicals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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