Correlation Between Daejung Chemicals and Samsung Special
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Samsung Special 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 Samsung Special 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 Samsung Special Purpose, you can compare the effects of market volatilities on Daejung Chemicals and Samsung Special 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 Samsung Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Samsung Special.
Diversification Opportunities for Daejung Chemicals and Samsung Special
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daejung and Samsung is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Samsung Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Special Purpose 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 Samsung Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Special Purpose has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Samsung Special go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Samsung Special
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Samsung Special. In addition to that, Daejung Chemicals is 1.43 times more volatile than Samsung Special Purpose. It trades about -0.08 of its total potential returns per unit of risk. Samsung Special Purpose is currently generating about -0.05 per unit of volatility. If you would invest 255,000 in Samsung Special Purpose on September 12, 2024 and sell it today you would lose (46,000) from holding Samsung Special Purpose or give up 18.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Samsung Special Purpose
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Samsung Special Purpose |
Daejung Chemicals and Samsung Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Samsung Special
The main advantage of trading using opposite Daejung Chemicals and Samsung Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Samsung Special 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 Samsung Special will offset losses from the drop in Samsung Special's long position.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. Chunbo Co | Daejung Chemicals vs. DukSan Neolux CoLtd | Daejung Chemicals vs. Hyosung Chemical Corp |
| Samsung Special vs. Daewon Media Co | Samsung Special vs. DC Media Co | Samsung Special vs. Next Entertainment World | Samsung Special vs. Daejung Chemicals Metals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |