Correlation Between Daejung Chemicals and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Heungkuk Metaltech 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 Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Daejung Chemicals and Heungkuk Metaltech 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 Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Heungkuk Metaltech.
Diversification Opportunities for Daejung Chemicals and Heungkuk Metaltech
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daejung and Heungkuk is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Heungkuk Metaltech
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Heungkuk Metaltech. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 1.02 times less risky than Heungkuk Metaltech. The stock trades about -0.06 of its potential returns per unit of risk. The Heungkuk Metaltech CoLtd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 538,433 in Heungkuk Metaltech CoLtd on November 3, 2024 and sell it today you would lose (19,433) from holding Heungkuk Metaltech CoLtd or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Heungkuk Metaltech CoLtd |
Daejung Chemicals and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Heungkuk Metaltech
The main advantage of trading using opposite Daejung Chemicals and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Daejung Chemicals vs. Jb Financial | Daejung Chemicals vs. Cloud Air CoLtd | Daejung Chemicals vs. GS Retail Co | Daejung Chemicals vs. Echomarketing CoLtd |
| Heungkuk Metaltech vs. Hanwha Life Insurance | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Haitai Confectionery Foods | Heungkuk Metaltech vs. CJ Seafood Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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