Correlation Between Duksan Hi and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Sangshin Electronics 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 Sangshin Electronics 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 Sangshin Electronics Co, you can compare the effects of market volatilities on Duksan Hi and Sangshin Electronics 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 Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Sangshin Electronics.
Diversification Opportunities for Duksan Hi and Sangshin Electronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Duksan and Sangshin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics 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 Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of Duksan Hi i.e., Duksan Hi and Sangshin Electronics go up and down completely randomly.
Pair Corralation between Duksan Hi and Sangshin Electronics
Assuming the 90 days trading horizon Duksan Hi Metal is expected to under-perform the Sangshin Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Duksan Hi Metal is 1.17 times less risky than Sangshin Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Sangshin Electronics Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 319,000 in Sangshin Electronics Co on September 3, 2024 and sell it today you would lose (26,000) from holding Sangshin Electronics Co or give up 8.15% 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. Sangshin Electronics Co
Performance |
| Timeline |
| Duksan Hi Metal |
| Sangshin Electronics |
Duksan Hi and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duksan Hi and Sangshin Electronics
The main advantage of trading using opposite Duksan Hi and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duksan Hi position performs unexpectedly, Sangshin Electronics 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| Duksan Hi vs. Dongsin Engineering Construction | Duksan Hi vs. Doosan Fuel Cell | Duksan Hi vs. Daishin Balance 1 | Duksan Hi vs. Total Soft Bank |
| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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