Correlation Between Duksan Hi and Finetechnix CoLtd
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Finetechnix CoLtd 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 Finetechnix CoLtd 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 Finetechnix CoLtd, you can compare the effects of market volatilities on Duksan Hi and Finetechnix CoLtd 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 Finetechnix CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Finetechnix CoLtd.
Diversification Opportunities for Duksan Hi and Finetechnix CoLtd
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Duksan and Finetechnix is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd 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 Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of Duksan Hi i.e., Duksan Hi and Finetechnix CoLtd go up and down completely randomly.
Pair Corralation between Duksan Hi and Finetechnix CoLtd
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the Finetechnix CoLtd. In addition to that, Duksan Hi is 1.75 times more volatile than Finetechnix CoLtd. It trades about -0.23 of its total potential returns per unit of risk. Finetechnix CoLtd is currently generating about -0.4 per unit of volatility. If you would invest 105,400 in Finetechnix CoLtd on August 31, 2024 and sell it today you would lose (15,100) from holding Finetechnix CoLtd or give up 14.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Finetechnix CoLtd
Performance |
| Timeline |
| Duksan Hi Metal |
| Finetechnix CoLtd |
Duksan Hi and Finetechnix CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Finetechnix CoLtd
The main advantage of trading using opposite Duksan Hi and Finetechnix CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Finetechnix CoLtd 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 Finetechnix CoLtd will offset losses from the drop in Finetechnix CoLtd's long position.| Duksan Hi vs. Dongsin Engineering Construction | Duksan Hi vs. Doosan Fuel Cell | Duksan Hi vs. Daishin Balance 1 | Duksan Hi vs. Total Soft Bank |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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