Correlation Between Duksan Hi and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and KCC Engineering 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 KCC Engineering 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 KCC Engineering Construction, you can compare the effects of market volatilities on Duksan Hi and KCC Engineering 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 KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and KCC Engineering.
Diversification Opportunities for Duksan Hi and KCC Engineering
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Duksan and KCC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons 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 KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Duksan Hi i.e., Duksan Hi and KCC Engineering go up and down completely randomly.
Pair Corralation between Duksan Hi and KCC Engineering
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 2.4 times more return on investment than KCC Engineering. However, Duksan Hi is 2.4 times more volatile than KCC Engineering Construction. It trades about 0.16 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.32 per unit of risk. If you would invest 383,000 in Duksan Hi Metal on October 25, 2024 and sell it today you would earn a total of 23,000 from holding Duksan Hi Metal or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. KCC Engineering Construction
Performance |
| Timeline |
| Duksan Hi Metal |
| KCC Engineering Cons |
Duksan Hi and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and KCC Engineering
The main advantage of trading using opposite Duksan Hi and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Duksan Hi vs. Samsung Electronics Co | Duksan Hi vs. Samsung Electronics Co | Duksan Hi vs. SK Hynix | Duksan Hi vs. HMM Co |
| KCC Engineering vs. SK Telecom Co | KCC Engineering vs. Digital Power Communications | KCC Engineering vs. PJ Metal Co | KCC Engineering vs. Duksan Hi Metal |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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