Correlation Between Duksan Hi and HS Valve
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and HS Valve 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 HS Valve 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 HS Valve Co, you can compare the effects of market volatilities on Duksan Hi and HS Valve 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 HS Valve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and HS Valve.
Diversification Opportunities for Duksan Hi and HS Valve
Very weak diversification
The 3 months correlation between Duksan and 039610 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and HS Valve Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HS Valve 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 HS Valve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HS Valve has no effect on the direction of Duksan Hi i.e., Duksan Hi and HS Valve go up and down completely randomly.
Pair Corralation between Duksan Hi and HS Valve
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the HS Valve. But the stock apears to be less risky and, when comparing its historical volatility, Duksan Hi Metal is 1.84 times less risky than HS Valve. The stock trades about -0.08 of its potential returns per unit of risk. The HS Valve Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,195,000 in HS Valve Co on October 26, 2024 and sell it today you would lose (312,000) from holding HS Valve Co or give up 26.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.17% |
| Values | Daily Returns |
Duksan Hi Metal vs. HS Valve Co
Performance |
| Timeline |
| Duksan Hi Metal |
| HS Valve |
Duksan Hi and HS Valve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and HS Valve
The main advantage of trading using opposite Duksan Hi and HS Valve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, HS Valve 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 HS Valve will offset losses from the drop in HS Valve's long position.| Duksan Hi vs. Hannong Chemicals | Duksan Hi vs. SK Chemicals Co | Duksan Hi vs. Dongil Metal Co | Duksan Hi vs. Miwon Chemicals Co |
| HS Valve vs. Daejung Chemicals Metals | HS Valve vs. Tae Kyung Chemical | HS Valve vs. Duksan Hi Metal | HS Valve vs. Youngchang Chemical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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