Correlation Between Naver and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Naver 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 Naver and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and Duksan Hi Metal, you can compare the effects of market volatilities on Naver 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 Naver with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and Duksan Hi.
Diversification Opportunities for Naver and Duksan Hi
Pay attention - limited upside
The 3 months correlation between Naver and Duksan is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Naver 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 Naver 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 Naver 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 Naver i.e., Naver and Duksan Hi go up and down completely randomly.
Pair Corralation between Naver and Duksan Hi
Assuming the 90 days trading horizon Naver is expected to generate 0.59 times more return on investment than Duksan Hi. However, Naver is 1.69 times less risky than Duksan Hi. It trades about 0.28 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.06 per unit of risk. If you would invest 18,220,000 in Naver on September 14, 2024 and sell it today you would earn a total of 2,580,000 from holding Naver or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naver vs. Duksan Hi Metal
Performance |
| Timeline |
| Naver |
| Duksan Hi Metal |
Naver and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naver and Duksan Hi
The main advantage of trading using opposite Naver and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver 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.| Naver vs. YG Entertainment | Naver vs. JYP Entertainment | Naver vs. Cube Entertainment | Naver vs. FNC Entertainment Co |
| Duksan Hi vs. Cube Entertainment | Duksan Hi vs. Dreamus Company | Duksan Hi vs. LG Energy Solution | Duksan Hi vs. Dongwon System |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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