Correlation Between Daejung Chemicals and Samyung Trading
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Samyung Trading 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 Daejung Chemicals and Samyung Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and Samyung Trading Co, you can compare the effects of market volatilities on Daejung Chemicals and Samyung Trading 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 Daejung Chemicals with a short position of Samyung Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Samyung Trading.
Diversification Opportunities for Daejung Chemicals and Samyung Trading
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daejung and Samyung is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Samyung Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyung Trading and Daejung Chemicals 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 Daejung Chemicals Metals are associated (or correlated) with Samyung Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyung Trading has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Samyung Trading go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Samyung Trading
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Samyung Trading. In addition to that, Daejung Chemicals is 2.15 times more volatile than Samyung Trading Co. It trades about -0.03 of its total potential returns per unit of risk. Samyung Trading Co is currently generating about -0.04 per unit of volatility. If you would invest 1,269,000 in Samyung Trading Co on November 6, 2024 and sell it today you would lose (30,000) from holding Samyung Trading Co or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Samyung Trading Co
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Samyung Trading |
Daejung Chemicals and Samyung Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Samyung Trading
The main advantage of trading using opposite Daejung Chemicals and Samyung Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Samyung Trading 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 Samyung Trading will offset losses from the drop in Samyung Trading's long position.| Daejung Chemicals vs. Kukdong Oil Chemicals | Daejung Chemicals vs. SH Energy Chemical | Daejung Chemicals vs. Samsung Life Insurance | Daejung Chemicals vs. Kyung In Synthetic Corp |
| Samyung Trading vs. Puloon Technology | Samyung Trading vs. Ewon Comfortech Co | Samyung Trading vs. Nice Information Telecommunication | Samyung Trading vs. RFTech 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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