Correlation Between Duksan Hi and Digital Power
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Digital Power 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 Digital Power 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 Digital Power Communications, you can compare the effects of market volatilities on Duksan Hi and Digital Power 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 Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Digital Power.
Diversification Opportunities for Duksan Hi and Digital Power
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duksan and Digital is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun 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 Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of Duksan Hi i.e., Duksan Hi and Digital Power go up and down completely randomly.
Pair Corralation between Duksan Hi and Digital Power
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the Digital Power. In addition to that, Duksan Hi is 1.58 times more volatile than Digital Power Communications. It trades about -0.06 of its total potential returns per unit of risk. Digital Power Communications is currently generating about 0.05 per unit of volatility. If you would invest 782,438 in Digital Power Communications on October 29, 2024 and sell it today you would earn a total of 35,562 from holding Digital Power Communications or generate 4.55% 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. Digital Power Communications
Performance |
| Timeline |
| Duksan Hi Metal |
| Digital Power Commun |
Duksan Hi and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Digital Power
The main advantage of trading using opposite Duksan Hi and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Digital Power 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 Digital Power will offset losses from the drop in Digital Power's long position.| Duksan Hi vs. BGF Retail Co | Duksan Hi vs. Hanjin Transportation Co | Duksan Hi vs. Nature and Environment | Duksan Hi vs. Daechang Steel Co |
| Digital Power vs. HB Technology TD | Digital Power vs. Puloon Technology | Digital Power vs. Kbi Metal Co | Digital Power vs. Korean Drug 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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