Correlation Between Daewon Chemical and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Daewon Chemical and JC Chemical 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 JC Chemical 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 JC Chemical Co, you can compare the effects of market volatilities on Daewon Chemical and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Chemical and JC Chemical.
Diversification Opportunities for Daewon Chemical and JC Chemical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daewon and 137950 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Chemical Co and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Daewon Chemical i.e., Daewon Chemical and JC Chemical go up and down completely randomly.
Pair Corralation between Daewon Chemical and JC Chemical
Assuming the 90 days trading horizon Daewon Chemical Co is expected to under-perform the JC Chemical. In addition to that, Daewon Chemical is 1.27 times more volatile than JC Chemical Co. It trades about -0.06 of its total potential returns per unit of risk. JC Chemical Co is currently generating about -0.07 per unit of volatility. If you would invest 522,115 in JC Chemical Co on October 26, 2024 and sell it today you would lose (145,615) from holding JC Chemical Co or give up 27.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Chemical Co vs. JC Chemical Co
Performance |
| Timeline |
| Daewon Chemical |
| JC Chemical |
Daewon Chemical and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Chemical and JC Chemical
The main advantage of trading using opposite Daewon Chemical and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Chemical position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| Daewon Chemical vs. SAMG Entertainment Co | Daewon Chemical vs. Daewon Media Co | Daewon Chemical vs. MEDIANA CoLtd | Daewon Chemical vs. Playgram Co |
| JC Chemical vs. Dongsin Engineering Construction | JC Chemical vs. Doosan Fuel Cell | JC Chemical vs. Daishin Balance 1 | JC Chemical vs. Total Soft Bank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |