Correlation Between Daejung Chemicals and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and DONGKUK TED 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 DONGKUK TED 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 DONGKUK TED METAL, you can compare the effects of market volatilities on Daejung Chemicals and DONGKUK TED 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 DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and DONGKUK TED.
Diversification Opportunities for Daejung Chemicals and DONGKUK TED
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daejung and DONGKUK is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and DONGKUK TED go up and down completely randomly.
Pair Corralation between Daejung Chemicals and DONGKUK TED
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the DONGKUK TED. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 1.58 times less risky than DONGKUK TED. The stock trades about -0.14 of its potential returns per unit of risk. The DONGKUK TED METAL is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 711,000 in DONGKUK TED METAL on August 30, 2024 and sell it today you would lose (94,000) from holding DONGKUK TED METAL or give up 13.22% 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. DONGKUK TED METAL
Performance |
| Timeline |
| Daejung Chemicals Metals |
| DONGKUK TED METAL |
Daejung Chemicals and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and DONGKUK TED
The main advantage of trading using opposite Daejung Chemicals and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED's long position.| Daejung Chemicals vs. Hyunwoo Industrial Co | Daejung Chemicals vs. Infinitt Healthcare Co | Daejung Chemicals vs. Aprogen Healthcare Games | Daejung Chemicals vs. Chorokbaem Healthcare Co |
| DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. LG Energy Solution | DONGKUK TED vs. SK Hynix |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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