Correlation Between Daejung Chemicals and UTI
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and UTI 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 UTI 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 UTI Inc, you can compare the effects of market volatilities on Daejung Chemicals and UTI 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 UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and UTI.
Diversification Opportunities for Daejung Chemicals and UTI
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daejung and UTI is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and UTI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTI Inc 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 UTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTI Inc has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and UTI go up and down completely randomly.
Pair Corralation between Daejung Chemicals and UTI
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to generate 0.41 times more return on investment than UTI. However, Daejung Chemicals Metals is 2.45 times less risky than UTI. It trades about -0.05 of its potential returns per unit of risk. UTI Inc is currently generating about -0.02 per unit of risk. If you would invest 1,647,569 in Daejung Chemicals Metals on September 15, 2024 and sell it today you would lose (335,569) from holding Daejung Chemicals Metals or give up 20.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. UTI Inc
Performance |
| Timeline |
| Daejung Chemicals Metals |
| UTI Inc |
Daejung Chemicals and UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and UTI
The main advantage of trading using opposite Daejung Chemicals and UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, UTI 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 UTI will offset losses from the drop in UTI'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 |
| UTI vs. Nice Information Telecommunication | UTI vs. Daejung Chemicals Metals | UTI vs. Dongil Metal Co | UTI vs. Ssangyong Information Communication |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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