Correlation Between Duksan Hi and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Daedong Metals 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 Daedong Metals 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 Daedong Metals Co, you can compare the effects of market volatilities on Duksan Hi and Daedong Metals 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 Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Daedong Metals.
Diversification Opportunities for Duksan Hi and Daedong Metals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duksan and Daedong is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals 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 Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Duksan Hi i.e., Duksan Hi and Daedong Metals go up and down completely randomly.
Pair Corralation between Duksan Hi and Daedong Metals
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the Daedong Metals. But the stock apears to be less risky and, when comparing its historical volatility, Duksan Hi Metal is 2.6 times less risky than Daedong Metals. The stock trades about -0.3 of its potential returns per unit of risk. The Daedong Metals Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 622,000 in Daedong Metals Co on September 1, 2024 and sell it today you would earn a total of 120,000 from holding Daedong Metals Co or generate 19.29% 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. Daedong Metals Co
Performance |
| Timeline |
| Duksan Hi Metal |
| Daedong Metals |
Duksan Hi and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Daedong Metals
The main advantage of trading using opposite Duksan Hi and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Duksan Hi vs. Daiyang Metal Co | Duksan Hi vs. PJ Metal Co | Duksan Hi vs. Dongbang Transport Logistics | Duksan Hi vs. Nasmedia Co |
| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Hwashin Precision Engineering | Daedong Metals vs. YOUNGHWA TECH 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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