Correlation Between Clean Science and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Clean Science 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 Clean Science and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Science co and Duksan Hi Metal, you can compare the effects of market volatilities on Clean Science 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 Clean Science with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Duksan Hi.
Diversification Opportunities for Clean Science and Duksan Hi
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clean and Duksan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science 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 Clean Science 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 Clean Science 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 Clean Science i.e., Clean Science and Duksan Hi go up and down completely randomly.
Pair Corralation between Clean Science and Duksan Hi
Assuming the 90 days trading horizon Clean Science co is expected to generate 1.35 times more return on investment than Duksan Hi. However, Clean Science is 1.35 times more volatile than Duksan Hi Metal. It trades about 0.24 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about 0.02 per unit of risk. If you would invest 450,000 in Clean Science co on November 3, 2024 and sell it today you would earn a total of 59,000 from holding Clean Science co or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Science co vs. Duksan Hi Metal
Performance |
| Timeline |
| Clean Science co |
| Duksan Hi Metal |
Clean Science and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Science and Duksan Hi
The main advantage of trading using opposite Clean Science and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science 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.| Clean Science vs. Han Kook Steel | Clean Science vs. SS TECH | Clean Science vs. Vitzro Tech Co | Clean Science vs. KMH Hitech Co |
| Duksan Hi vs. Korean Air Lines | Duksan Hi vs. Korea Computer | Duksan Hi vs. Jin Air Co | Duksan Hi vs. Ssangyong Information Communication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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