Correlation Between Dongnam Chemical and FLITTO
Can any of the company-specific risk be diversified away by investing in both Dongnam Chemical and FLITTO 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 FLITTO 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 FLITTO Inc, you can compare the effects of market volatilities on Dongnam Chemical and FLITTO 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 FLITTO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnam Chemical and FLITTO.
Diversification Opportunities for Dongnam Chemical and FLITTO
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongnam and FLITTO is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dongnam Chemical Co and FLITTO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLITTO Inc 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 FLITTO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLITTO Inc has no effect on the direction of Dongnam Chemical i.e., Dongnam Chemical and FLITTO go up and down completely randomly.
Pair Corralation between Dongnam Chemical and FLITTO
Assuming the 90 days trading horizon Dongnam Chemical Co is expected to under-perform the FLITTO. But the stock apears to be less risky and, when comparing its historical volatility, Dongnam Chemical Co is 4.45 times less risky than FLITTO. The stock trades about -0.09 of its potential returns per unit of risk. The FLITTO Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,410,000 in FLITTO Inc on September 12, 2024 and sell it today you would lose (716,000) from holding FLITTO Inc or give up 29.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnam Chemical Co vs. FLITTO Inc
Performance |
| Timeline |
| Dongnam Chemical |
| FLITTO Inc |
Dongnam Chemical and FLITTO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnam Chemical and FLITTO
The main advantage of trading using opposite Dongnam Chemical and FLITTO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnam Chemical position performs unexpectedly, FLITTO 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 FLITTO will offset losses from the drop in FLITTO's long position.| Dongnam Chemical vs. Samsung Electronics Co | Dongnam Chemical vs. Samsung Electronics Co | Dongnam Chemical vs. SK Hynix | Dongnam Chemical vs. POSCO Holdings |
| FLITTO vs. SK Chemicals Co | FLITTO vs. BooKook Steel Co | FLITTO vs. Hankuk Steel Wire | FLITTO vs. Finebesteel |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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