Correlation Between Daejung Chemicals and OLIPASS
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and OLIPASS 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 OLIPASS 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 OLIPASS, you can compare the effects of market volatilities on Daejung Chemicals and OLIPASS 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 OLIPASS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and OLIPASS.
Diversification Opportunities for Daejung Chemicals and OLIPASS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daejung and OLIPASS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and OLIPASS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLIPASS 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 OLIPASS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLIPASS has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and OLIPASS go up and down completely randomly.
Pair Corralation between Daejung Chemicals and OLIPASS
Assuming the 90 days trading horizon Daejung Chemicals is expected to generate 5.98 times less return on investment than OLIPASS. But when comparing it to its historical volatility, Daejung Chemicals Metals is 6.55 times less risky than OLIPASS. It trades about 0.14 of its potential returns per unit of risk. OLIPASS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 228,000 in OLIPASS on November 28, 2024 and sell it today you would earn a total of 25,000 from holding OLIPASS or generate 10.96% 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. OLIPASS
Performance |
| Timeline |
| Daejung Chemicals Metals |
| OLIPASS |
Daejung Chemicals and OLIPASS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and OLIPASS
The main advantage of trading using opposite Daejung Chemicals and OLIPASS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, OLIPASS 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 OLIPASS will offset losses from the drop in OLIPASS's long position.| Daejung Chemicals vs. HB Technology TD | Daejung Chemicals vs. Digital Imaging Technology | Daejung Chemicals vs. Sangshin Electronics Co | Daejung Chemicals vs. Hana 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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