Correlation Between Daewon Chemical and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both Daewon Chemical and MEDIPOST 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 MEDIPOST 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 MEDIPOST Co, you can compare the effects of market volatilities on Daewon Chemical and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Chemical and MEDIPOST.
Diversification Opportunities for Daewon Chemical and MEDIPOST
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewon and MEDIPOST is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Chemical Co and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of Daewon Chemical i.e., Daewon Chemical and MEDIPOST go up and down completely randomly.
Pair Corralation between Daewon Chemical and MEDIPOST
Assuming the 90 days trading horizon Daewon Chemical Co is expected to under-perform the MEDIPOST. But the stock apears to be less risky and, when comparing its historical volatility, Daewon Chemical Co is 5.58 times less risky than MEDIPOST. The stock trades about 0.0 of its potential returns per unit of risk. The MEDIPOST Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,026,000 in MEDIPOST Co on October 28, 2024 and sell it today you would earn a total of 135,000 from holding MEDIPOST Co or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Chemical Co vs. MEDIPOST Co
Performance |
| Timeline |
| Daewon Chemical |
| MEDIPOST |
Daewon Chemical and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Chemical and MEDIPOST
The main advantage of trading using opposite Daewon Chemical and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Chemical position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST's long position.| Daewon Chemical vs. ABOV Semiconductor Co | Daewon Chemical vs. Daejung Chemicals Metals | Daewon Chemical vs. Sewoon Medical Co | Daewon Chemical vs. Moonbae Steel |
| MEDIPOST vs. Korean Air Lines | MEDIPOST vs. Top Material Co | MEDIPOST vs. WONIK Materials CoLtd | MEDIPOST vs. Dongbang Transport Logistics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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