Correlation Between Duksan Hi and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Duksan Hi and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Daejung Chemicals.
Diversification Opportunities for Duksan Hi and Daejung Chemicals
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Duksan and Daejung is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Duksan Hi i.e., Duksan Hi and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Duksan Hi and Daejung Chemicals
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the Daejung Chemicals. In addition to that, Duksan Hi is 1.93 times more volatile than Daejung Chemicals Metals. It trades about -0.07 of its total potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.06 per unit of volatility. If you would invest 1,637,918 in Daejung Chemicals Metals on November 3, 2024 and sell it today you would lose (352,918) from holding Daejung Chemicals Metals or give up 21.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duksan Hi Metal vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Duksan Hi Metal |
| Daejung Chemicals Metals |
Duksan Hi and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Daejung Chemicals
The main advantage of trading using opposite Duksan Hi and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Duksan Hi vs. Wireless Power Amplifier | Duksan Hi vs. Ssangyong Information Communication | Duksan Hi vs. TS Investment Corp | Duksan Hi vs. Atinum Investment Co |
| Daejung Chemicals vs. Jb Financial | Daejung Chemicals vs. Cloud Air CoLtd | Daejung Chemicals vs. GS Retail Co | Daejung Chemicals vs. Echomarketing CoLtd |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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