Correlation Between Duksan Hi and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on Duksan Hi and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Hanjoo Light.
Diversification Opportunities for Duksan Hi and Hanjoo Light
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Duksan and Hanjoo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Duksan Hi i.e., Duksan Hi and Hanjoo Light go up and down completely randomly.
Pair Corralation between Duksan Hi and Hanjoo Light
Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 0.76 times more return on investment than Hanjoo Light. However, Duksan Hi Metal is 1.32 times less risky than Hanjoo Light. It trades about 0.0 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.06 per unit of risk. If you would invest 509,000 in Duksan Hi Metal on August 28, 2024 and sell it today you would lose (113,500) from holding Duksan Hi Metal or give up 22.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.84% |
| Values | Daily Returns |
Duksan Hi Metal vs. Hanjoo Light Metal
Performance |
| Timeline |
| Duksan Hi Metal |
| Hanjoo Light Metal |
Duksan Hi and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Hanjoo Light
The main advantage of trading using opposite Duksan Hi and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Duksan Hi vs. Korea Real Estate | Duksan Hi vs. Korea Ratings Co | Duksan Hi vs. IQuest Co | Duksan Hi vs. Wonbang Tech Co |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |