Correlation Between Daejung Chemicals and Kortek
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Kortek 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 Kortek 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 Kortek, you can compare the effects of market volatilities on Daejung Chemicals and Kortek 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 Kortek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Kortek.
Diversification Opportunities for Daejung Chemicals and Kortek
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daejung and Kortek is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Kortek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kortek 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 Kortek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kortek has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Kortek go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Kortek
Assuming the 90 days trading horizon Daejung Chemicals is expected to generate 5.57 times less return on investment than Kortek. In addition to that, Daejung Chemicals is 1.29 times more volatile than Kortek. It trades about 0.02 of its total potential returns per unit of risk. Kortek is currently generating about 0.12 per unit of volatility. If you would invest 794,975 in Kortek on October 25, 2024 and sell it today you would earn a total of 13,025 from holding Kortek or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Kortek
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Kortek |
Daejung Chemicals and Kortek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Kortek
The main advantage of trading using opposite Daejung Chemicals and Kortek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Kortek 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 Kortek will offset losses from the drop in Kortek's long position.| Daejung Chemicals vs. Automobile Pc | Daejung Chemicals vs. Korean Drug Co | Daejung Chemicals vs. TS Investment Corp | Daejung Chemicals vs. Ssangyong Information Communication |
| Kortek vs. Sangsin Energy Display | Kortek vs. Samsung Electronics Co | Kortek vs. Automobile Pc | Kortek vs. Alton Sports CoLtd |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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