Correlation Between Wonik Ips and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both Wonik Ips and Dongjin Semichem 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 Wonik Ips and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonik Ips Co and Dongjin Semichem Co, you can compare the effects of market volatilities on Wonik Ips and Dongjin Semichem 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 Wonik Ips with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonik Ips and Dongjin Semichem.
Diversification Opportunities for Wonik Ips and Dongjin Semichem
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wonik and Dongjin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Wonik Ips Co and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and Wonik Ips 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 Wonik Ips Co are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of Wonik Ips i.e., Wonik Ips and Dongjin Semichem go up and down completely randomly.
Pair Corralation between Wonik Ips and Dongjin Semichem
Assuming the 90 days trading horizon Wonik Ips Co is expected to under-perform the Dongjin Semichem. But the stock apears to be less risky and, when comparing its historical volatility, Wonik Ips Co is 1.36 times less risky than Dongjin Semichem. The stock trades about -0.25 of its potential returns per unit of risk. The Dongjin Semichem Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 2,720,000 in Dongjin Semichem Co on August 29, 2024 and sell it today you would lose (350,000) from holding Dongjin Semichem Co or give up 12.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonik Ips Co vs. Dongjin Semichem Co
Performance |
| Timeline |
| Wonik Ips |
| Dongjin Semichem |
Wonik Ips and Dongjin Semichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonik Ips and Dongjin Semichem
The main advantage of trading using opposite Wonik Ips and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonik Ips position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.The idea behind Wonik Ips Co and Dongjin Semichem Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. Lotte Chemical Corp | Dongjin Semichem vs. Hyundai Steel | Dongjin Semichem vs. Seah Steel Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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