Correlation Between Hyosung Chemical and Daehan Synthetic
Can any of the company-specific risk be diversified away by investing in both Hyosung Chemical and Daehan Synthetic 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 Hyosung Chemical and Daehan Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Chemical Corp and Daehan Synthetic Fiber, you can compare the effects of market volatilities on Hyosung Chemical and Daehan Synthetic 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 Hyosung Chemical with a short position of Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Chemical and Daehan Synthetic.
Diversification Opportunities for Hyosung Chemical and Daehan Synthetic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyosung and Daehan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Chemical Corp and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber and Hyosung 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 Hyosung Chemical Corp are associated (or correlated) with Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Hyosung Chemical i.e., Hyosung Chemical and Daehan Synthetic go up and down completely randomly.
Pair Corralation between Hyosung Chemical and Daehan Synthetic
Assuming the 90 days trading horizon Hyosung Chemical Corp is expected to under-perform the Daehan Synthetic. In addition to that, Hyosung Chemical is 2.64 times more volatile than Daehan Synthetic Fiber. It trades about -0.07 of its total potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about 0.05 per unit of volatility. If you would invest 9,899,056 in Daehan Synthetic Fiber on September 4, 2024 and sell it today you would earn a total of 1,750,944 from holding Daehan Synthetic Fiber or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Chemical Corp vs. Daehan Synthetic Fiber
Performance |
| Timeline |
| Hyosung Chemical Corp |
| Daehan Synthetic Fiber |
Hyosung Chemical and Daehan Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Chemical and Daehan Synthetic
The main advantage of trading using opposite Hyosung Chemical and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Chemical position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.| Hyosung Chemical vs. LG Chem | Hyosung Chemical vs. DukSan Neolux CoLtd | Hyosung Chemical vs. LIG ES SPAC | Hyosung Chemical vs. Sukgyung AT Co |
| Daehan Synthetic vs. LG Display Co | Daehan Synthetic vs. Sangsin Energy Display | Daehan Synthetic vs. Okins Electronics Co | Daehan Synthetic vs. Visang Education |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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