Correlation Between Korea Alcohol and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol 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 Korea Alcohol and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and Duksan Hi Metal, you can compare the effects of market volatilities on Korea Alcohol 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 Korea Alcohol with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and Duksan Hi.
Diversification Opportunities for Korea Alcohol and Duksan Hi
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Korea and Duksan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial 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 Korea Alcohol 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 Korea Alcohol Industrial 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 Korea Alcohol i.e., Korea Alcohol and Duksan Hi go up and down completely randomly.
Pair Corralation between Korea Alcohol and Duksan Hi
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.44 times more return on investment than Duksan Hi. However, Korea Alcohol Industrial is 2.26 times less risky than Duksan Hi. It trades about -0.17 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.3 per unit of risk. If you would invest 906,000 in Korea Alcohol Industrial on September 1, 2024 and sell it today you would lose (47,000) from holding Korea Alcohol Industrial or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. Duksan Hi Metal
Performance |
| Timeline |
| Korea Alcohol Industrial |
| Duksan Hi Metal |
Korea Alcohol and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and Duksan Hi
The main advantage of trading using opposite Korea Alcohol and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol 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.| Korea Alcohol vs. Golden Bridge Investment | Korea Alcohol vs. Daol Investment Securities | Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. Nh Investment And |
| Duksan Hi vs. Daiyang Metal Co | Duksan Hi vs. PJ Metal Co | Duksan Hi vs. Dongbang Transport Logistics | Duksan Hi vs. Nasmedia 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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