Correlation Between Duksan Hi and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals, you can compare the effects of market volatilities on Duksan Hi and Hannong Chemicals 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 Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Hannong Chemicals.
Diversification Opportunities for Duksan Hi and Hannong Chemicals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duksan and Hannong is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals 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 Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of Duksan Hi i.e., Duksan Hi and Hannong Chemicals go up and down completely randomly.
Pair Corralation between Duksan Hi and Hannong Chemicals
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 0.95 times more return on investment than Hannong Chemicals. However, Duksan Hi Metal is 1.05 times less risky than Hannong Chemicals. It trades about -0.36 of its potential returns per unit of risk. Hannong Chemicals is currently generating about -0.4 per unit of risk. If you would invest 480,000 in Duksan Hi Metal on August 24, 2024 and sell it today you would lose (102,000) from holding Duksan Hi Metal or give up 21.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Hannong Chemicals
Performance |
| Timeline |
| Duksan Hi Metal |
| Hannong Chemicals |
Duksan Hi and Hannong Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Hannong Chemicals
The main advantage of trading using opposite Duksan Hi and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.| Duksan Hi vs. Korea Real Estate | Duksan Hi vs. Korea Ratings Co | Duksan Hi vs. IQuest Co | Duksan Hi vs. Wonbang Tech Co |
| Hannong Chemicals vs. AptaBio Therapeutics | Hannong Chemicals vs. Daewoo SBI SPAC | Hannong Chemicals vs. Dream Security co | Hannong Chemicals vs. Microfriend |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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