Correlation Between Dongnam Chemical and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Dongnam Chemical and Stic Investments 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 Dongnam Chemical and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongnam Chemical Co and Stic Investments, you can compare the effects of market volatilities on Dongnam Chemical and Stic Investments 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 Dongnam Chemical with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnam Chemical and Stic Investments.
Diversification Opportunities for Dongnam Chemical and Stic Investments
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongnam and Stic is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dongnam Chemical Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Dongnam Chemical 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 Dongnam Chemical Co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Dongnam Chemical i.e., Dongnam Chemical and Stic Investments go up and down completely randomly.
Pair Corralation between Dongnam Chemical and Stic Investments
Assuming the 90 days trading horizon Dongnam Chemical is expected to generate 1.41 times less return on investment than Stic Investments. But when comparing it to its historical volatility, Dongnam Chemical Co is 1.42 times less risky than Stic Investments. It trades about 0.06 of its potential returns per unit of risk. Stic Investments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 798,000 in Stic Investments on October 14, 2024 and sell it today you would earn a total of 56,000 from holding Stic Investments or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnam Chemical Co vs. Stic Investments
Performance |
| Timeline |
| Dongnam Chemical |
| Stic Investments |
Dongnam Chemical and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnam Chemical and Stic Investments
The main advantage of trading using opposite Dongnam Chemical and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnam Chemical position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Dongnam Chemical vs. Shinil Industrial Co | Dongnam Chemical vs. DRB Industrial Co | Dongnam Chemical vs. Seoyon Topmetal Co | Dongnam Chemical vs. Nh Investment And |
| Stic Investments vs. Kyung In Synthetic Corp | Stic Investments vs. KPX Green Chemical | Stic Investments vs. Dongnam Chemical Co | Stic Investments vs. Sung Bo Chemicals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |