Correlation Between Duksan Hi and Formetal
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Duksan Hi and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Formetal.
Diversification Opportunities for Duksan Hi and Formetal
Very weak diversification
The 3 months correlation between Duksan and Formetal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Duksan Hi i.e., Duksan Hi and Formetal go up and down completely randomly.
Pair Corralation between Duksan Hi and Formetal
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 0.57 times more return on investment than Formetal. However, Duksan Hi Metal is 1.74 times less risky than Formetal. It trades about 0.36 of its potential returns per unit of risk. Formetal Co is currently generating about -0.08 per unit of risk. If you would invest 387,500 in Duksan Hi Metal on November 27, 2024 and sell it today you would earn a total of 64,000 from holding Duksan Hi Metal or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Formetal Co
Performance |
| Timeline |
| Duksan Hi Metal |
| Formetal |
Duksan Hi and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Formetal
The main advantage of trading using opposite Duksan Hi and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Duksan Hi vs. Hanwha Life Insurance | Duksan Hi vs. EBEST Investment Securities | Duksan Hi vs. Atinum Investment Co | Duksan Hi vs. SBI Investment KOREA |
| Formetal vs. Korea Air Svc | Formetal vs. BNK Financial Group | Formetal vs. ITM Semiconductor Co | Formetal vs. Jeju Air 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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