Correlation Between Duksan Hi and Dong A
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on Duksan Hi and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Dong A.
Diversification Opportunities for Duksan Hi and Dong A
Weak diversification
The 3 months correlation between Duksan and Dong is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Duksan Hi i.e., Duksan Hi and Dong A go up and down completely randomly.
Pair Corralation between Duksan Hi and Dong A
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 1.25 times more return on investment than Dong A. However, Duksan Hi is 1.25 times more volatile than Dong A Steel Technology. It trades about -0.01 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about -0.02 per unit of risk. If you would invest 567,000 in Duksan Hi Metal on October 30, 2024 and sell it today you would lose (163,500) from holding Duksan Hi Metal or give up 28.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Dong A Steel Technology
Performance |
| Timeline |
| Duksan Hi Metal |
| Dong A Steel |
Duksan Hi and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Dong A
The main advantage of trading using opposite Duksan Hi and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Duksan Hi vs. Shinhan Inverse Silver | Duksan Hi vs. JYP Entertainment Corp | Duksan Hi vs. YG Entertainment | Duksan Hi vs. Barunson Entertainment Arts |
| Dong A vs. Hyundai Industrial Co | Dong A vs. Daesung Industrial Co | Dong A vs. Sung Bo Chemicals | Dong A vs. Pyung Hwa Industrial |
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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