Correlation Between Dongil Metal and Kg Chemical
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Kg Chemical 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 Dongil Metal and Kg Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and Kg Chemical, you can compare the effects of market volatilities on Dongil Metal and Kg Chemical 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 Dongil Metal with a short position of Kg Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Kg Chemical.
Diversification Opportunities for Dongil Metal and Kg Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongil and 001390 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Kg Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kg Chemical and Dongil Metal 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 Dongil Metal Co are associated (or correlated) with Kg Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kg Chemical has no effect on the direction of Dongil Metal i.e., Dongil Metal and Kg Chemical go up and down completely randomly.
Pair Corralation between Dongil Metal and Kg Chemical
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.93 times more return on investment than Kg Chemical. However, Dongil Metal Co is 1.07 times less risky than Kg Chemical. It trades about 0.22 of its potential returns per unit of risk. Kg Chemical is currently generating about 0.08 per unit of risk. If you would invest 767,751 in Dongil Metal Co on October 17, 2024 and sell it today you would earn a total of 44,249 from holding Dongil Metal Co or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Kg Chemical
Performance |
| Timeline |
| Dongil Metal |
| Kg Chemical |
Dongil Metal and Kg Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Kg Chemical
The main advantage of trading using opposite Dongil Metal and Kg Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Kg Chemical 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 Kg Chemical will offset losses from the drop in Kg Chemical's long position.| Dongil Metal vs. Grand Korea Leisure | Dongil Metal vs. Insung Information Co | Dongil Metal vs. Daou Data Corp | Dongil Metal vs. LG Household Healthcare |
| Kg Chemical vs. Hwasung Industrial Co | Kg Chemical vs. Pyung Hwa Industrial | Kg Chemical vs. PJ Metal Co | Kg Chemical vs. Dongil Metal 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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