Correlation Between HS Valve and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both HS Valve and Daejung Chemicals 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 HS Valve and Daejung Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HS Valve Co and Daejung Chemicals Metals, you can compare the effects of market volatilities on HS Valve and Daejung Chemicals 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 HS Valve with a short position of Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of HS Valve and Daejung Chemicals.
Diversification Opportunities for HS Valve and Daejung Chemicals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 039610 and Daejung is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding HS Valve Co and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals and HS Valve 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 HS Valve Co are associated (or correlated) with Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of HS Valve i.e., HS Valve and Daejung Chemicals go up and down completely randomly.
Pair Corralation between HS Valve and Daejung Chemicals
Assuming the 90 days trading horizon HS Valve Co is expected to generate 3.34 times more return on investment than Daejung Chemicals. However, HS Valve is 3.34 times more volatile than Daejung Chemicals Metals. It trades about 0.2 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.19 per unit of risk. If you would invest 803,000 in HS Valve Co on November 5, 2024 and sell it today you would earn a total of 94,000 from holding HS Valve Co or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HS Valve Co vs. Daejung Chemicals Metals
Performance |
| Timeline |
| HS Valve |
| Daejung Chemicals Metals |
HS Valve and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HS Valve and Daejung Chemicals
The main advantage of trading using opposite HS Valve and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HS Valve position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| HS Valve vs. PH Tech Co | HS Valve vs. Kolon Plastics | HS Valve vs. National Plastic Co | HS Valve vs. Ecoplastic |
| Daejung Chemicals vs. LG Household Healthcare | Daejung Chemicals vs. Sangsangin Investment Securities | Daejung Chemicals vs. Hanjoo Light Metal | Daejung Chemicals vs. Youngsin Metal Industrial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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