Correlation Between Daejung Chemicals and Global Standard
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on Daejung Chemicals and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Global Standard.
Diversification Opportunities for Daejung Chemicals and Global Standard
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejung and Global is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Global Standard go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Global Standard
Assuming the 90 days trading horizon Daejung Chemicals is expected to generate 3.77 times less return on investment than Global Standard. But when comparing it to its historical volatility, Daejung Chemicals Metals is 2.36 times less risky than Global Standard. It trades about 0.15 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,654,592 in Global Standard Technology on October 24, 2024 and sell it today you would earn a total of 160,408 from holding Global Standard Technology or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Global Standard Technology
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Global Standard Tech |
Daejung Chemicals and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Global Standard
The main advantage of trading using opposite Daejung Chemicals and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| Daejung Chemicals vs. Youl Chon Chemical | Daejung Chemicals vs. Kukdong Oil Chemicals | Daejung Chemicals vs. Lotte Fine Chemical | Daejung Chemicals vs. Duksan Hi Metal |
| Global Standard vs. Jin Air Co | Global Standard vs. Mobile Appliance | Global Standard vs. Daejung Chemicals Metals | Global Standard vs. Duksan Hi Metal |
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..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |