Correlation Between Daewon Media and Korea Petro
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Korea Petro 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 Daewon Media and Korea Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewon Media Co and Korea Petro Chemical, you can compare the effects of market volatilities on Daewon Media and Korea Petro 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 Daewon Media with a short position of Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Korea Petro.
Diversification Opportunities for Daewon Media and Korea Petro
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daewon and Korea is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical and Daewon Media 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 Daewon Media Co are associated (or correlated) with Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of Daewon Media i.e., Daewon Media and Korea Petro go up and down completely randomly.
Pair Corralation between Daewon Media and Korea Petro
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 1.3 times more return on investment than Korea Petro. However, Daewon Media is 1.3 times more volatile than Korea Petro Chemical. It trades about 0.21 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about 0.13 per unit of risk. If you would invest 788,610 in Daewon Media Co on October 16, 2024 and sell it today you would earn a total of 84,390 from holding Daewon Media Co or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Daewon Media Co vs. Korea Petro Chemical
Performance |
| Timeline |
| Daewon Media |
| Korea Petro Chemical |
Daewon Media and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Korea Petro
The main advantage of trading using opposite Daewon Media and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| Daewon Media vs. LG Chemicals | Daewon Media vs. Kbi Metal Co | Daewon Media vs. E Investment Development | Daewon Media vs. Korea Investment Holdings |
| Korea Petro vs. FNSTech Co | Korea Petro vs. Sungchang Autotech Co | Korea Petro vs. Hwangkum Steel Technology | Korea Petro vs. Lion Chemtech 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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |