Correlation Between JC Chemical and Dongnam Chemical
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Dongnam Chemical 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 JC Chemical and Dongnam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Chemical Co and Dongnam Chemical Co, you can compare the effects of market volatilities on JC Chemical and Dongnam Chemical 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 JC Chemical with a short position of Dongnam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Dongnam Chemical.
Diversification Opportunities for JC Chemical and Dongnam Chemical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 137950 and Dongnam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Dongnam Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnam Chemical and JC Chemical 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 JC Chemical Co are associated (or correlated) with Dongnam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnam Chemical has no effect on the direction of JC Chemical i.e., JC Chemical and Dongnam Chemical go up and down completely randomly.
Pair Corralation between JC Chemical and Dongnam Chemical
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Dongnam Chemical. In addition to that, JC Chemical is 4.33 times more volatile than Dongnam Chemical Co. It trades about -0.15 of its total potential returns per unit of risk. Dongnam Chemical Co is currently generating about -0.17 per unit of volatility. If you would invest 3,070,000 in Dongnam Chemical Co on September 1, 2024 and sell it today you would lose (110,000) from holding Dongnam Chemical Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Dongnam Chemical Co
Performance |
| Timeline |
| JC Chemical |
| Dongnam Chemical |
JC Chemical and Dongnam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Dongnam Chemical
The main advantage of trading using opposite JC Chemical and Dongnam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Dongnam Chemical 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 Dongnam Chemical will offset losses from the drop in Dongnam Chemical's long position.| JC Chemical vs. Korea Information Engineering | JC Chemical vs. DataSolution | JC Chemical vs. Cube Entertainment | JC Chemical vs. SCI Information Service |
| Dongnam Chemical vs. AptaBio Therapeutics | Dongnam Chemical vs. Daewoo SBI SPAC | Dongnam Chemical vs. Dream Security co | Dongnam Chemical vs. Microfriend |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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