Correlation Between Insung Information and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Insung Information and Duksan Hi 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 Insung Information and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Duksan Hi Metal, you can compare the effects of market volatilities on Insung Information and Duksan Hi 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 Insung Information with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Duksan Hi.
Diversification Opportunities for Insung Information and Duksan Hi
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Insung and Duksan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal and Insung Information 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 Insung Information Co are associated (or correlated) with Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Insung Information i.e., Insung Information and Duksan Hi go up and down completely randomly.
Pair Corralation between Insung Information and Duksan Hi
Assuming the 90 days trading horizon Insung Information Co is expected to generate 1.54 times more return on investment than Duksan Hi. However, Insung Information is 1.54 times more volatile than Duksan Hi Metal. It trades about 0.02 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about 0.0 per unit of risk. If you would invest 206,145 in Insung Information Co on August 28, 2024 and sell it today you would lose (13,345) from holding Insung Information Co or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Insung Information |
| Duksan Hi Metal |
Insung Information and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Duksan Hi
The main advantage of trading using opposite Insung Information and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Insung Information vs. Korea Real Estate | Insung Information vs. Korea Ratings Co | Insung Information vs. IQuest Co | Insung Information vs. Wonbang Tech Co |
| Duksan Hi vs. Korea Real Estate | Duksan Hi vs. Korea Ratings Co | Duksan Hi vs. IQuest Co | Duksan Hi vs. Wonbang Tech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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