Correlation Between RS Automation and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both RS Automation and Daejung Chemicals 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 RS Automation and Daejung Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RS Automation CoLtd and Daejung Chemicals Metals, you can compare the effects of market volatilities on RS Automation and Daejung Chemicals 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 RS Automation with a short position of Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of RS Automation and Daejung Chemicals.
Diversification Opportunities for RS Automation and Daejung Chemicals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 140670 and Daejung is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding RS Automation CoLtd and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals and RS Automation 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 RS Automation CoLtd are associated (or correlated) with Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of RS Automation i.e., RS Automation and Daejung Chemicals go up and down completely randomly.
Pair Corralation between RS Automation and Daejung Chemicals
Assuming the 90 days trading horizon RS Automation CoLtd is expected to generate 8.84 times more return on investment than Daejung Chemicals. However, RS Automation is 8.84 times more volatile than Daejung Chemicals Metals. It trades about 0.26 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about 0.15 per unit of risk. If you would invest 1,056,000 in RS Automation CoLtd on October 23, 2024 and sell it today you would earn a total of 400,000 from holding RS Automation CoLtd or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RS Automation CoLtd vs. Daejung Chemicals Metals
Performance |
| Timeline |
| RS Automation CoLtd |
| Daejung Chemicals Metals |
RS Automation and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RS Automation and Daejung Chemicals
The main advantage of trading using opposite RS Automation and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RS Automation position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| RS Automation vs. Seoyon Topmetal Co | RS Automation vs. MetaLabs Co | RS Automation vs. Korean Reinsurance Co | RS Automation vs. Woori Financial Group |
| Daejung Chemicals vs. Seoul Electronics Telecom | Daejung Chemicals vs. Yura Tech Co | Daejung Chemicals vs. Narae Nanotech Corp | Daejung Chemicals vs. FNSTech 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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