Correlation Between SS TECH and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both SS TECH and Dongjin Semichem 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 SS TECH and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Dongjin Semichem Co, you can compare the effects of market volatilities on SS TECH and Dongjin Semichem 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 SS TECH with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Dongjin Semichem.
Diversification Opportunities for SS TECH and Dongjin Semichem
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 101490 and Dongjin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and SS TECH 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 SS TECH are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of SS TECH i.e., SS TECH and Dongjin Semichem go up and down completely randomly.
Pair Corralation between SS TECH and Dongjin Semichem
Assuming the 90 days trading horizon SS TECH is expected to generate 1.0 times more return on investment than Dongjin Semichem. However, SS TECH is 1.0 times more volatile than Dongjin Semichem Co. It trades about 0.04 of its potential returns per unit of risk. Dongjin Semichem Co is currently generating about -0.16 per unit of risk. If you would invest 2,315,000 in SS TECH on August 29, 2024 and sell it today you would earn a total of 50,000 from holding SS TECH or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Dongjin Semichem Co
Performance |
| Timeline |
| SS TECH |
| Dongjin Semichem |
SS TECH and Dongjin Semichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Dongjin Semichem
The main advantage of trading using opposite SS TECH and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. Lotte Chemical Corp | Dongjin Semichem vs. Hyundai Steel | Dongjin Semichem vs. Seah Steel Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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