Correlation Between Daejung Chemicals and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Daejung Chemicals and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Kukil Metal.
Diversification Opportunities for Daejung Chemicals and Kukil Metal
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daejung and Kukil is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Kukil Metal go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Kukil Metal
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 0.64 times more return on investment than Kukil Metal. However, Daejung Chemicals Metals is 1.57 times less risky than Kukil Metal. It trades about -0.06 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.04 per unit of risk. If you would invest 1,637,918 in Daejung Chemicals Metals on November 3, 2024 and sell it today you would lose (352,918) from holding Daejung Chemicals Metals or give up 21.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Kukil Metal Co
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Kukil Metal |
Daejung Chemicals and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Kukil Metal
The main advantage of trading using opposite Daejung Chemicals and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal'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 |
| Kukil Metal vs. KG Eco Technology | Kukil Metal vs. iNtRON Biotechnology | Kukil Metal vs. GS Retail Co | Kukil Metal vs. Ilji Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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