Correlation Between Aprogen Healthcare and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Aprogen Healthcare and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Daejung Chemicals.
Diversification Opportunities for Aprogen Healthcare and Daejung Chemicals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aprogen and Daejung is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Daejung Chemicals
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to generate 3.65 times more return on investment than Daejung Chemicals. However, Aprogen Healthcare is 3.65 times more volatile than Daejung Chemicals Metals. It trades about 0.18 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about 0.16 per unit of risk. If you would invest 49,400 in Aprogen Healthcare Games on November 28, 2024 and sell it today you would earn a total of 5,100 from holding Aprogen Healthcare Games or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Daejung Chemicals Metals |
Aprogen Healthcare and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Daejung Chemicals
The main advantage of trading using opposite Aprogen Healthcare and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Aprogen Healthcare vs. Daejung Chemicals Metals | Aprogen Healthcare vs. Busan Industrial Co | Aprogen Healthcare vs. Industrial Bank | Aprogen Healthcare vs. Duksan Hi Metal |
| Daejung Chemicals vs. Lotte Fine Chemical | Daejung Chemicals vs. Netmarble Games Corp | Daejung Chemicals vs. Seoyon Topmetal Co | Daejung Chemicals vs. Dongnam Chemical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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