Correlation Between DYPNF CoLtd and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both DYPNF CoLtd and Kumho Ind 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 DYPNF CoLtd and Kumho Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DYPNF CoLtd and Kumho Ind, you can compare the effects of market volatilities on DYPNF CoLtd and Kumho Ind 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 DYPNF CoLtd with a short position of Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of DYPNF CoLtd and Kumho Ind.
Diversification Opportunities for DYPNF CoLtd and Kumho Ind
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DYPNF and Kumho is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding DYPNF CoLtd and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind and DYPNF CoLtd 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 DYPNF CoLtd are associated (or correlated) with Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of DYPNF CoLtd i.e., DYPNF CoLtd and Kumho Ind go up and down completely randomly.
Pair Corralation between DYPNF CoLtd and Kumho Ind
Assuming the 90 days trading horizon DYPNF CoLtd is expected to generate 1.62 times more return on investment than Kumho Ind. However, DYPNF CoLtd is 1.62 times more volatile than Kumho Ind. It trades about -0.08 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.14 per unit of risk. If you would invest 2,230,345 in DYPNF CoLtd on September 3, 2024 and sell it today you would lose (1,094,345) from holding DYPNF CoLtd or give up 49.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DYPNF CoLtd vs. Kumho Ind
Performance |
| Timeline |
| DYPNF CoLtd |
| Kumho Ind |
DYPNF CoLtd and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DYPNF CoLtd and Kumho Ind
The main advantage of trading using opposite DYPNF CoLtd and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DYPNF CoLtd position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| DYPNF CoLtd vs. TOPMATERIAL LTD | DYPNF CoLtd vs. LAKE MATERIALS LTD | DYPNF CoLtd vs. Korean Reinsurance Co | DYPNF CoLtd vs. Samsung Life Insurance |
| Kumho Ind vs. CJ Seafood Corp | Kumho Ind vs. Hyundai Green Food | Kumho Ind vs. NH Investment Securities | Kumho Ind vs. Seoul Food Industrial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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