Correlation Between Duksan Hi and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Daechang Steel 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 Daechang Steel 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 Daechang Steel Co, you can compare the effects of market volatilities on Duksan Hi and Daechang Steel 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 Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Daechang Steel.
Diversification Opportunities for Duksan Hi and Daechang Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duksan and Daechang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang 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 Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of Duksan Hi i.e., Duksan Hi and Daechang Steel go up and down completely randomly.
Pair Corralation between Duksan Hi and Daechang Steel
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 1.56 times more return on investment than Daechang Steel. However, Duksan Hi is 1.56 times more volatile than Daechang Steel Co. It trades about 0.14 of its potential returns per unit of risk. Daechang Steel Co is currently generating about -0.04 per unit of risk. If you would invest 385,000 in Duksan Hi Metal on October 30, 2024 and sell it today you would earn a total of 18,500 from holding Duksan Hi Metal or generate 4.81% 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. Daechang Steel Co
Performance |
| Timeline |
| Duksan Hi Metal |
| Daechang Steel |
Duksan Hi and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Daechang Steel
The main advantage of trading using opposite Duksan Hi and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Daechang Steel 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 Daechang Steel will offset losses from the drop in Daechang Steel'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 |
| Daechang Steel vs. INNOX Advanced Materials | Daechang Steel vs. LAKE MATERIALS LTD | Daechang Steel vs. Shinsegae Engineering Construction | Daechang Steel vs. Hyundai Engineering Construction |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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