Correlation Between Aprogen Healthcare and Dongnam Chemical
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Dongnam 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 Aprogen Healthcare and Dongnam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and Dongnam Chemical Co, you can compare the effects of market volatilities on Aprogen Healthcare and Dongnam 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 Aprogen Healthcare with a short position of Dongnam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Dongnam Chemical.
Diversification Opportunities for Aprogen Healthcare and Dongnam Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aprogen and Dongnam is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Dongnam Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnam Chemical and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Dongnam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnam Chemical has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Dongnam Chemical go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Dongnam Chemical
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Dongnam Chemical. In addition to that, Aprogen Healthcare is 3.63 times more volatile than Dongnam Chemical Co. It trades about -0.03 of its total potential returns per unit of risk. Dongnam Chemical Co is currently generating about -0.03 per unit of volatility. If you would invest 4,216,300 in Dongnam Chemical Co on November 1, 2024 and sell it today you would lose (811,300) from holding Dongnam Chemical Co or give up 19.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.96% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Dongnam Chemical Co
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Dongnam Chemical |
Aprogen Healthcare and Dongnam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Dongnam Chemical
The main advantage of trading using opposite Aprogen Healthcare and Dongnam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Dongnam 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 Dongnam Chemical will offset losses from the drop in Dongnam Chemical's long position.| Aprogen Healthcare vs. Daejung Chemicals Metals | Aprogen Healthcare vs. Hannong Chemicals | Aprogen Healthcare vs. Anam Electronics Co | Aprogen Healthcare vs. Miwon Chemicals Co |
| Dongnam Chemical vs. Mgame Corp | Dongnam Chemical vs. Digital Power Communications | Dongnam Chemical vs. Jinro Distillers Co | Dongnam Chemical vs. Aprogen Healthcare Games |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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