Correlation Between Duksan Hi and Samsung Heavy
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Samsung Heavy 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 Samsung Heavy 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 Samsung Heavy Industries, you can compare the effects of market volatilities on Duksan Hi and Samsung Heavy 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 Samsung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Samsung Heavy.
Diversification Opportunities for Duksan Hi and Samsung Heavy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duksan and Samsung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Samsung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Heavy Industries 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 Samsung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Heavy Industries has no effect on the direction of Duksan Hi i.e., Duksan Hi and Samsung Heavy go up and down completely randomly.
Pair Corralation between Duksan Hi and Samsung Heavy
Assuming the 90 days trading horizon Duksan Hi is expected to generate 1.27 times less return on investment than Samsung Heavy. But when comparing it to its historical volatility, Duksan Hi Metal is 1.85 times less risky than Samsung Heavy. It trades about 0.25 of its potential returns per unit of risk. Samsung Heavy Industries is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,301,000 in Samsung Heavy Industries on November 29, 2024 and sell it today you would earn a total of 194,000 from holding Samsung Heavy Industries or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Samsung Heavy Industries
Performance |
| Timeline |
| Duksan Hi Metal |
| Samsung Heavy Industries |
Duksan Hi and Samsung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Samsung Heavy
The main advantage of trading using opposite Duksan Hi and Samsung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Samsung Heavy 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 Samsung Heavy will offset losses from the drop in Samsung Heavy's long position.| Duksan Hi vs. Dongwoon Anatech Co | Duksan Hi vs. Playgram Co | Duksan Hi vs. FNSTech Co | Duksan Hi vs. Homecast CoLtd |
| Samsung Heavy vs. Lotte Rental Co | Samsung Heavy vs. Shinil Electronics Co | Samsung Heavy vs. Nice Information Telecommunication | Samsung Heavy vs. Jahwa Electronics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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