Correlation Between Kukdong Oil and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and DSC Investment 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 Kukdong Oil and DSC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and DSC Investment, you can compare the effects of market volatilities on Kukdong Oil and DSC Investment 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 Kukdong Oil with a short position of DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and DSC Investment.
Diversification Opportunities for Kukdong Oil and DSC Investment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kukdong and DSC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and DSC Investment go up and down completely randomly.
Pair Corralation between Kukdong Oil and DSC Investment
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the DSC Investment. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 1.34 times less risky than DSC Investment. The stock trades about -0.02 of its potential returns per unit of risk. The DSC Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 285,000 in DSC Investment on September 1, 2024 and sell it today you would earn a total of 4,000 from holding DSC Investment or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. DSC Investment
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| DSC Investment |
Kukdong Oil and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and DSC Investment
The main advantage of trading using opposite Kukdong Oil and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial Co | DSC Investment vs. Busan Ind |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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