Correlation Between DYPNF CoLtd and Geumhwa Plant
Can any of the company-specific risk be diversified away by investing in both DYPNF CoLtd and Geumhwa Plant 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 Geumhwa Plant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DYPNF CoLtd and Geumhwa Plant Service, you can compare the effects of market volatilities on DYPNF CoLtd and Geumhwa Plant 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 Geumhwa Plant. Check out your portfolio center. Please also check ongoing floating volatility patterns of DYPNF CoLtd and Geumhwa Plant.
Diversification Opportunities for DYPNF CoLtd and Geumhwa Plant
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DYPNF and Geumhwa is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding DYPNF CoLtd and Geumhwa Plant Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geumhwa Plant Service 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 Geumhwa Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geumhwa Plant Service has no effect on the direction of DYPNF CoLtd i.e., DYPNF CoLtd and Geumhwa Plant go up and down completely randomly.
Pair Corralation between DYPNF CoLtd and Geumhwa Plant
Assuming the 90 days trading horizon DYPNF CoLtd is expected to generate 3.96 times more return on investment than Geumhwa Plant. However, DYPNF CoLtd is 3.96 times more volatile than Geumhwa Plant Service. It trades about 0.16 of its potential returns per unit of risk. Geumhwa Plant Service is currently generating about -0.28 per unit of risk. If you would invest 1,012,000 in DYPNF CoLtd on September 1, 2024 and sell it today you would earn a total of 168,000 from holding DYPNF CoLtd or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DYPNF CoLtd vs. Geumhwa Plant Service
Performance |
| Timeline |
| DYPNF CoLtd |
| Geumhwa Plant Service |
DYPNF CoLtd and Geumhwa Plant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DYPNF CoLtd and Geumhwa Plant
The main advantage of trading using opposite DYPNF CoLtd and Geumhwa Plant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DYPNF CoLtd position performs unexpectedly, Geumhwa Plant 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 Geumhwa Plant will offset losses from the drop in Geumhwa Plant's long position.| DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. LG Energy Solution | DYPNF CoLtd vs. SK Hynix |
| Geumhwa Plant vs. Korea New Network | Geumhwa Plant vs. ICD Co | Geumhwa Plant vs. DYPNF CoLtd | Geumhwa Plant vs. Busan Industrial 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |