Correlation Between Daedong Metals and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Daedong Metals 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 Daedong Metals and Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on Daedong Metals 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 Daedong Metals with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Metals and Duksan Hi.
Diversification Opportunities for Daedong Metals and Duksan Hi
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daedong and Duksan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Metals Co 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 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 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 Daedong Metals i.e., Daedong Metals and Duksan Hi go up and down completely randomly.
Pair Corralation between Daedong Metals and Duksan Hi
Assuming the 90 days trading horizon Daedong Metals Co is expected to generate 1.32 times more return on investment than Duksan Hi. However, Daedong Metals is 1.32 times more volatile than Duksan Hi Metal. It trades about -0.01 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.19 per unit of risk. If you would invest 839,000 in Daedong Metals Co on September 3, 2024 and sell it today you would lose (97,000) from holding Daedong Metals Co or give up 11.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daedong Metals Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Daedong Metals |
| Duksan Hi Metal |
Daedong Metals and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Metals and Duksan Hi
The main advantage of trading using opposite Daedong Metals and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Metals 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.| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Hwashin Precision Engineering | Daedong Metals vs. YOUNGHWA TECH Co |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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