Correlation Between Daejung Chemicals and HYUNDAI BIOLAND
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND 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 HYUNDAI BIOLAND CoLtd, you can compare the effects of market volatilities on Daejung Chemicals and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and HYUNDAI BIOLAND.
Diversification Opportunities for Daejung Chemicals and HYUNDAI BIOLAND
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daejung and HYUNDAI is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and HYUNDAI BIOLAND CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI BIOLAND 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 HYUNDAI BIOLAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI BIOLAND CoLtd has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and HYUNDAI BIOLAND go up and down completely randomly.
Pair Corralation between Daejung Chemicals and HYUNDAI BIOLAND
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 0.92 times more return on investment than HYUNDAI BIOLAND. However, Daejung Chemicals Metals is 1.08 times less risky than HYUNDAI BIOLAND. It trades about 0.09 of its potential returns per unit of risk. HYUNDAI BIOLAND CoLtd is currently generating about 0.05 per unit of risk. If you would invest 1,258,000 in Daejung Chemicals Metals on September 15, 2024 and sell it today you would earn a total of 54,000 from holding Daejung Chemicals Metals or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. HYUNDAI BIOLAND CoLtd
Performance |
| Timeline |
| Daejung Chemicals Metals |
| HYUNDAI BIOLAND CoLtd |
Daejung Chemicals and HYUNDAI BIOLAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and HYUNDAI BIOLAND
The main advantage of trading using opposite Daejung Chemicals and HYUNDAI BIOLAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, HYUNDAI BIOLAND 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 HYUNDAI BIOLAND will offset losses from the drop in HYUNDAI BIOLAND's long position.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. Chunbo Co | Daejung Chemicals vs. DukSan Neolux CoLtd | Daejung Chemicals vs. LIG ES SPAC |
| HYUNDAI BIOLAND vs. Pungguk Ethanol Industrial | HYUNDAI BIOLAND vs. Koryo Credit Information | HYUNDAI BIOLAND vs. Daejung Chemicals Metals | HYUNDAI BIOLAND vs. Seoul Food Industrial |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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