Correlation Between Formetal and DukSan Neolux
Can any of the company-specific risk be diversified away by investing in both Formetal and DukSan Neolux 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 Formetal and DukSan Neolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and DukSan Neolux CoLtd, you can compare the effects of market volatilities on Formetal and DukSan Neolux 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 Formetal with a short position of DukSan Neolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and DukSan Neolux.
Diversification Opportunities for Formetal and DukSan Neolux
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Formetal and DukSan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and DukSan Neolux CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DukSan Neolux CoLtd and Formetal 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 Formetal Co are associated (or correlated) with DukSan Neolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DukSan Neolux CoLtd has no effect on the direction of Formetal i.e., Formetal and DukSan Neolux go up and down completely randomly.
Pair Corralation between Formetal and DukSan Neolux
Assuming the 90 days trading horizon Formetal Co is expected to generate 1.22 times more return on investment than DukSan Neolux. However, Formetal is 1.22 times more volatile than DukSan Neolux CoLtd. It trades about 0.11 of its potential returns per unit of risk. DukSan Neolux CoLtd is currently generating about -0.09 per unit of risk. If you would invest 280,000 in Formetal Co on September 12, 2024 and sell it today you would earn a total of 20,500 from holding Formetal Co or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. DukSan Neolux CoLtd
Performance |
| Timeline |
| Formetal |
| DukSan Neolux CoLtd |
Formetal and DukSan Neolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and DukSan Neolux
The main advantage of trading using opposite Formetal and DukSan Neolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal position performs unexpectedly, DukSan Neolux 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 DukSan Neolux will offset losses from the drop in DukSan Neolux's long position.| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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