Correlation Between Kukil Metal and Daejoo
Can any of the company-specific risk be diversified away by investing in both Kukil Metal and Daejoo 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 Kukil Metal and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Daejoo Inc, you can compare the effects of market volatilities on Kukil Metal and Daejoo 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 Kukil Metal with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Daejoo.
Diversification Opportunities for Kukil Metal and Daejoo
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kukil and Daejoo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and Kukil Metal 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 Kukil Metal Co are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of Kukil Metal i.e., Kukil Metal and Daejoo go up and down completely randomly.
Pair Corralation between Kukil Metal and Daejoo
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.21 times more return on investment than Daejoo. However, Kukil Metal is 1.21 times more volatile than Daejoo Inc. It trades about 0.32 of its potential returns per unit of risk. Daejoo Inc is currently generating about 0.09 per unit of risk. If you would invest 168,527 in Kukil Metal Co on October 23, 2024 and sell it today you would earn a total of 11,973 from holding Kukil Metal Co or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kukil Metal Co vs. Daejoo Inc
Performance |
| Timeline |
| Kukil Metal |
| Daejoo Inc |
Kukil Metal and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Daejoo
The main advantage of trading using opposite Kukil Metal and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal position performs unexpectedly, Daejoo 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 Daejoo will offset losses from the drop in Daejoo's long position.| Kukil Metal vs. Dongnam Chemical Co | Kukil Metal vs. Youngchang Chemical Co | Kukil Metal vs. Miwon Chemical | Kukil Metal vs. Nice Information Telecommunication |
| Daejoo vs. LS Materials | Daejoo vs. Phoenix Materials Co | Daejoo vs. Digital Power Communications | Daejoo vs. Lotte Data 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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