Correlation Between Daedong Metals and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Daedong Metals and Kyung Chang 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 Daedong Metals and Kyung Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daedong Metals Co and Kyung Chang Industrial, you can compare the effects of market volatilities on Daedong Metals and Kyung Chang 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 Daedong Metals with a short position of Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Metals and Kyung Chang.
Diversification Opportunities for Daedong Metals and Kyung Chang
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daedong and Kyung is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Metals Co and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial and Daedong Metals 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 Daedong Metals Co are associated (or correlated) with Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Daedong Metals i.e., Daedong Metals and Kyung Chang go up and down completely randomly.
Pair Corralation between Daedong Metals and Kyung Chang
Assuming the 90 days trading horizon Daedong Metals Co is expected to generate 4.62 times more return on investment than Kyung Chang. However, Daedong Metals is 4.62 times more volatile than Kyung Chang Industrial. It trades about 0.13 of its potential returns per unit of risk. Kyung Chang Industrial is currently generating about -0.27 per unit of risk. If you would invest 632,000 in Daedong Metals Co on September 3, 2024 and sell it today you would earn a total of 110,000 from holding Daedong Metals Co or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daedong Metals Co vs. Kyung Chang Industrial
Performance |
| Timeline |
| Daedong Metals |
| Kyung Chang Industrial |
Daedong Metals and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Metals and Kyung Chang
The main advantage of trading using opposite Daedong Metals and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Metals position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Hwashin Precision Engineering | Daedong Metals vs. YOUNGHWA TECH Co |
| Kyung Chang vs. Orbitech Co | Kyung Chang vs. TK Chemical | Kyung Chang vs. Shinsung Delta Tech | Kyung Chang vs. Posco Chemical 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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