Correlation Between Daewon Chemical and UNISEM
Can any of the company-specific risk be diversified away by investing in both Daewon Chemical and UNISEM 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 Daewon Chemical and UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewon Chemical Co and UNISEM Co, you can compare the effects of market volatilities on Daewon Chemical and UNISEM 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 Daewon Chemical with a short position of UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Chemical and UNISEM.
Diversification Opportunities for Daewon Chemical and UNISEM
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daewon and UNISEM is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Chemical Co and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM and Daewon 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 Daewon Chemical Co are associated (or correlated) with UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Daewon Chemical i.e., Daewon Chemical and UNISEM go up and down completely randomly.
Pair Corralation between Daewon Chemical and UNISEM
Assuming the 90 days trading horizon Daewon Chemical Co is expected to under-perform the UNISEM. But the stock apears to be less risky and, when comparing its historical volatility, Daewon Chemical Co is 3.33 times less risky than UNISEM. The stock trades about 0.0 of its potential returns per unit of risk. The UNISEM Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 584,000 in UNISEM Co on October 28, 2024 and sell it today you would earn a total of 119,000 from holding UNISEM Co or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Chemical Co vs. UNISEM Co
Performance |
| Timeline |
| Daewon Chemical |
| UNISEM |
Daewon Chemical and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Chemical and UNISEM
The main advantage of trading using opposite Daewon Chemical and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Chemical position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Daewon Chemical vs. Daesung Industrial Co | Daewon Chemical vs. ECSTELECOM Co | Daewon Chemical vs. Songwon Industrial Co | Daewon Chemical vs. DRB Industrial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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