Correlation Between DukSan Neolux and BBC
Can any of the company-specific risk be diversified away by investing in both DukSan Neolux and BBC 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 DukSan Neolux and BBC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DukSan Neolux CoLtd and BBC Co, you can compare the effects of market volatilities on DukSan Neolux and BBC 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 DukSan Neolux with a short position of BBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DukSan Neolux and BBC.
Diversification Opportunities for DukSan Neolux and BBC
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DukSan and BBC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DukSan Neolux CoLtd and BBC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBC Co and DukSan Neolux 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 DukSan Neolux CoLtd are associated (or correlated) with BBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBC Co has no effect on the direction of DukSan Neolux i.e., DukSan Neolux and BBC go up and down completely randomly.
Pair Corralation between DukSan Neolux and BBC
Assuming the 90 days trading horizon DukSan Neolux CoLtd is expected to generate 1.3 times more return on investment than BBC. However, DukSan Neolux is 1.3 times more volatile than BBC Co. It trades about -0.03 of its potential returns per unit of risk. BBC Co is currently generating about -0.05 per unit of risk. If you would invest 3,610,000 in DukSan Neolux CoLtd on August 29, 2024 and sell it today you would lose (940,000) from holding DukSan Neolux CoLtd or give up 26.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DukSan Neolux CoLtd vs. BBC Co
Performance |
| Timeline |
| DukSan Neolux CoLtd |
| BBC Co |
DukSan Neolux and BBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DukSan Neolux and BBC
The main advantage of trading using opposite DukSan Neolux and BBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DukSan Neolux position performs unexpectedly, BBC 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 BBC will offset losses from the drop in BBC's long position.| DukSan Neolux vs. LG Chem | DukSan Neolux vs. Chunbo Co | DukSan Neolux vs. Hyosung Chemical Corp | DukSan Neolux vs. LIG ES SPAC |
| BBC vs. Air Busan Co | BBC vs. Cloud Air CoLtd | BBC vs. iNtRON Biotechnology | BBC vs. Lindeman Asia Investment |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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