Correlation Between Daejung Chemicals and Samlip General
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Samlip General 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 Samlip General 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 Samlip General Foods, you can compare the effects of market volatilities on Daejung Chemicals and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Samlip General.
Diversification Opportunities for Daejung Chemicals and Samlip General
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejung and Samlip is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Samlip General go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Samlip General
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 1.46 times more return on investment than Samlip General. However, Daejung Chemicals is 1.46 times more volatile than Samlip General Foods. It trades about -0.01 of its potential returns per unit of risk. Samlip General Foods is currently generating about -0.03 per unit of risk. If you would invest 1,571,229 in Daejung Chemicals Metals on October 13, 2024 and sell it today you would lose (254,229) from holding Daejung Chemicals Metals or give up 16.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Samlip General Foods
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Samlip General Foods |
Daejung Chemicals and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Samlip General
The main advantage of trading using opposite Daejung Chemicals and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Daejung Chemicals vs. Next Entertainment World | Daejung Chemicals vs. Choil Aluminum | Daejung Chemicals vs. Digital Multimedia Technology | Daejung Chemicals vs. DC Media Co |
| Samlip General vs. TOPMATERIAL LTD | Samlip General vs. INNOX Advanced Materials | Samlip General vs. Daejoo Electronic Materials | Samlip General vs. ITM Semiconductor 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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