Correlation Between Duksan Hi and DeviceENGCOLtd

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Can any of the company-specific risk be diversified away by investing in both Duksan Hi and DeviceENGCOLtd 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 DeviceENGCOLtd 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 DeviceENGCOLtd, you can compare the effects of market volatilities on Duksan Hi and DeviceENGCOLtd 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 DeviceENGCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and DeviceENGCOLtd.

Diversification Opportunities for Duksan Hi and DeviceENGCOLtd

DuksanDeviceENGCOLtdDiversified AwayDuksanDeviceENGCOLtdDiversified Away100%
0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Duksan and DeviceENGCOLtd is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and DeviceENGCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeviceENGCOLtd 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 DeviceENGCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeviceENGCOLtd has no effect on the direction of Duksan Hi i.e., Duksan Hi and DeviceENGCOLtd go up and down completely randomly.

Pair Corralation between Duksan Hi and DeviceENGCOLtd

Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 1.24 times more return on investment than DeviceENGCOLtd. However, Duksan Hi is 1.24 times more volatile than DeviceENGCOLtd. It trades about -0.04 of its potential returns per unit of risk. DeviceENGCOLtd is currently generating about -0.1 per unit of risk. If you would invest  502,000  in Duksan Hi Metal on November 23, 2024 and sell it today you would lose (65,500) from holding Duksan Hi Metal or give up 13.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.99%
ValuesDaily Returns

Duksan Hi Metal  vs.  DeviceENGCOLtd

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15077360 187870
       Timeline  
Duksan Hi Metal 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Duksan Hi Metal are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Duksan Hi sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3,2003,4003,6003,8004,0004,2004,400
DeviceENGCOLtd 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days DeviceENGCOLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11,00011,50012,00012,50013,000

Duksan Hi and DeviceENGCOLtd Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.64-7.22-4.8-2.380.02.374.827.279.7112.16 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15077360 187870
       Returns  

Pair Trading with Duksan Hi and DeviceENGCOLtd

The main advantage of trading using opposite Duksan Hi and DeviceENGCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, DeviceENGCOLtd 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 DeviceENGCOLtd will offset losses from the drop in DeviceENGCOLtd's long position.
The idea behind Duksan Hi Metal and DeviceENGCOLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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