Correlation Between Daejung Chemicals and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Daejung Chemicals and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Incar Financial.
Diversification Opportunities for Daejung Chemicals and Incar Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daejung and Incar is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Incar Financial go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Incar Financial
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 2.62 times less risky than Incar Financial. The stock trades about -0.32 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 539,000 in Incar Financial Service on September 1, 2024 and sell it today you would earn a total of 104,000 from holding Incar Financial Service or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Incar Financial Service
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Incar Financial Service |
Daejung Chemicals and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Incar Financial
The main advantage of trading using opposite Daejung Chemicals and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. Chunbo Co | Daejung Chemicals vs. LIG ES SPAC | Daejung Chemicals vs. Youngchang Chemical Co |
| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Mirae Asset Daewoo | Incar Financial vs. Finebesteel |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| 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 | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |