Correlation Between Daesung Private and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both Daesung Private and Dongjin Semichem 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 Daesung Private and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Private Equity and Dongjin Semichem Co, you can compare the effects of market volatilities on Daesung Private and Dongjin Semichem 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 Daesung Private with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Private and Dongjin Semichem.
Diversification Opportunities for Daesung Private and Dongjin Semichem
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daesung and Dongjin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Private Equity and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and Daesung Private 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 Daesung Private Equity are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of Daesung Private i.e., Daesung Private and Dongjin Semichem go up and down completely randomly.
Pair Corralation between Daesung Private and Dongjin Semichem
Assuming the 90 days trading horizon Daesung Private Equity is expected to generate 0.72 times more return on investment than Dongjin Semichem. However, Daesung Private Equity is 1.38 times less risky than Dongjin Semichem. It trades about -0.06 of its potential returns per unit of risk. Dongjin Semichem Co is currently generating about -0.23 per unit of risk. If you would invest 151,000 in Daesung Private Equity on September 3, 2024 and sell it today you would lose (9,300) from holding Daesung Private Equity or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Private Equity vs. Dongjin Semichem Co
Performance |
| Timeline |
| Daesung Private Equity |
| Dongjin Semichem |
Daesung Private and Dongjin Semichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Private and Dongjin Semichem
The main advantage of trading using opposite Daesung Private and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Private position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.| Daesung Private vs. Dongjin Semichem Co | Daesung Private vs. AhnLab Inc | Daesung Private vs. Posco ICT | Daesung Private vs. CJ ENM |
| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem vs. LF 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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