Correlation Between Duksan Hi and Hwasung Industrial
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Hwasung Industrial 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 Duksan Hi and Hwasung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duksan Hi Metal and Hwasung Industrial Co, you can compare the effects of market volatilities on Duksan Hi and Hwasung Industrial 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 Duksan Hi with a short position of Hwasung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Hwasung Industrial.
Diversification Opportunities for Duksan Hi and Hwasung Industrial
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duksan and Hwasung is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Hwasung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwasung Industrial and Duksan Hi 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 Duksan Hi Metal are associated (or correlated) with Hwasung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwasung Industrial has no effect on the direction of Duksan Hi i.e., Duksan Hi and Hwasung Industrial go up and down completely randomly.
Pair Corralation between Duksan Hi and Hwasung Industrial
Assuming the 90 days trading horizon Duksan Hi is expected to generate 5.94 times less return on investment than Hwasung Industrial. In addition to that, Duksan Hi is 1.57 times more volatile than Hwasung Industrial Co. It trades about 0.02 of its total potential returns per unit of risk. Hwasung Industrial Co is currently generating about 0.15 per unit of volatility. If you would invest 868,346 in Hwasung Industrial Co on October 16, 2024 and sell it today you would earn a total of 95,654 from holding Hwasung Industrial Co or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Hwasung Industrial Co
Performance |
| Timeline |
| Duksan Hi Metal |
| Hwasung Industrial |
Duksan Hi and Hwasung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Hwasung Industrial
The main advantage of trading using opposite Duksan Hi and Hwasung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Hwasung Industrial 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 Hwasung Industrial will offset losses from the drop in Hwasung Industrial's long position.| Duksan Hi vs. Aprogen Healthcare Games | Duksan Hi vs. Nable Communications | Duksan Hi vs. Youngsin Metal Industrial | Duksan Hi vs. Digital Power Communications |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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