Correlation Between DSC Investment and Korea Petro
Can any of the company-specific risk be diversified away by investing in both DSC Investment and Korea Petro 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 DSC Investment and Korea Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Korea Petro Chemical, you can compare the effects of market volatilities on DSC Investment and Korea Petro 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 DSC Investment with a short position of Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Korea Petro.
Diversification Opportunities for DSC Investment and Korea Petro
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DSC and Korea is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical and DSC Investment 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 DSC Investment are associated (or correlated) with Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of DSC Investment i.e., DSC Investment and Korea Petro go up and down completely randomly.
Pair Corralation between DSC Investment and Korea Petro
Assuming the 90 days trading horizon DSC Investment is expected to generate 2.37 times more return on investment than Korea Petro. However, DSC Investment is 2.37 times more volatile than Korea Petro Chemical. It trades about 0.43 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about -0.01 per unit of risk. If you would invest 274,000 in DSC Investment on December 4, 2024 and sell it today you would earn a total of 288,000 from holding DSC Investment or generate 105.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Korea Petro Chemical
Performance |
| Timeline |
| DSC Investment |
| Korea Petro Chemical |
DSC Investment and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Korea Petro
The main advantage of trading using opposite DSC Investment and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Company K Partners | DSC Investment vs. FnGuide |
| Korea Petro vs. Sejong Industrial | Korea Petro vs. Aprogen Healthcare Games | Korea Petro vs. Haitai Confectionery Foods | Korea Petro vs. Seoyon Topmetal 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |