Correlation Between DAEDUCK ELECTRONICS and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and Hanil Chemical 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 DAEDUCK ELECTRONICS and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and Hanil Chemical Ind, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and Hanil Chemical 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 DAEDUCK ELECTRONICS with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Hanil Chemical.
Diversification Opportunities for DAEDUCK ELECTRONICS and Hanil Chemical
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAEDUCK and Hanil is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Hanil Chemical go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Hanil Chemical
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 1.28 times more return on investment than Hanil Chemical. However, DAEDUCK ELECTRONICS is 1.28 times more volatile than Hanil Chemical Ind. It trades about 0.25 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about -0.36 per unit of risk. If you would invest 792,000 in DAEDUCK ELECTRONICS CoLtd on October 28, 2024 and sell it today you would earn a total of 49,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Hanil Chemical Ind
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Hanil Chemical Ind |
DAEDUCK ELECTRONICS and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Hanil Chemical
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| DAEDUCK ELECTRONICS vs. Ssangyong Information Communication | DAEDUCK ELECTRONICS vs. DataSolution | DAEDUCK ELECTRONICS vs. Koryo Credit Information | DAEDUCK ELECTRONICS vs. Hana Financial |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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