Correlation Between Duksan Hi and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd, you can compare the effects of market volatilities on Duksan Hi and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and CHEMTRONICSCOLtd.
Diversification Opportunities for Duksan Hi and CHEMTRONICSCOLtd
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Duksan and CHEMTRONICSCOLtd is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of Duksan Hi i.e., Duksan Hi and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between Duksan Hi and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon Duksan Hi is expected to generate 2.6 times less return on investment than CHEMTRONICSCOLtd. But when comparing it to its historical volatility, Duksan Hi Metal is 1.36 times less risky than CHEMTRONICSCOLtd. It trades about 0.25 of its potential returns per unit of risk. CHEMTRONICSCOLtd is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,635,000 in CHEMTRONICSCOLtd on October 25, 2024 and sell it today you would earn a total of 425,000 from holding CHEMTRONICSCOLtd or generate 25.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.0% |
Values | Daily Returns |
Duksan Hi Metal vs. CHEMTRONICSCOLtd
Performance |
Timeline |
Duksan Hi Metal |
CHEMTRONICSCOLtd |
Duksan Hi and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Duksan Hi and CHEMTRONICSCOLtd
The main advantage of trading using opposite Duksan Hi and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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