Correlation Between Chin Yang and Dongnam Chemical
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Dongnam Chemical 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 Chin Yang and Dongnam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Dongnam Chemical Co, you can compare the effects of market volatilities on Chin Yang and Dongnam Chemical 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 Chin Yang with a short position of Dongnam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Dongnam Chemical.
Diversification Opportunities for Chin Yang and Dongnam Chemical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chin and Dongnam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Dongnam Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnam Chemical and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Dongnam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnam Chemical has no effect on the direction of Chin Yang i.e., Chin Yang and Dongnam Chemical go up and down completely randomly.
Pair Corralation between Chin Yang and Dongnam Chemical
Assuming the 90 days trading horizon Chin Yang Chemical is expected to under-perform the Dongnam Chemical. In addition to that, Chin Yang is 3.96 times more volatile than Dongnam Chemical Co. It trades about -0.24 of its total potential returns per unit of risk. Dongnam Chemical Co is currently generating about -0.23 per unit of volatility. If you would invest 3,095,000 in Dongnam Chemical Co on September 3, 2024 and sell it today you would lose (135,000) from holding Dongnam Chemical Co or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. Dongnam Chemical Co
Performance |
| Timeline |
| Chin Yang Chemical |
| Dongnam Chemical |
Chin Yang and Dongnam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and Dongnam Chemical
The main advantage of trading using opposite Chin Yang and Dongnam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Dongnam Chemical 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 Dongnam Chemical will offset losses from the drop in Dongnam Chemical's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| Dongnam Chemical vs. BNK Financial Group | Dongnam Chemical vs. FNSTech Co | Dongnam Chemical vs. Shinhan Financial Group | Dongnam Chemical vs. Korea Shipbuilding Offshore |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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