Correlation Between DHP Korea and Aprogen Healthcare

Can any of the company-specific risk be diversified away by investing in both DHP Korea and Aprogen Healthcare 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 DHP Korea and Aprogen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DHP Korea Co and Aprogen Healthcare Games, you can compare the effects of market volatilities on DHP Korea and Aprogen Healthcare 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 DHP Korea with a short position of Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DHP Korea and Aprogen Healthcare.

Diversification Opportunities for DHP Korea and Aprogen Healthcare

0.56

Correlation Coefficient

DHP Korea  Aprogen Healthcare

Very weak diversification

The 3 months correlation between DHP and Aprogen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DHP Korea Co and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games and DHP Korea 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 DHP Korea Co are associated (or correlated) with Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of DHP Korea i.e., DHP Korea and Aprogen Healthcare go up and down completely randomly.

Pair Corralation between DHP Korea and Aprogen Healthcare

Assuming the 90 days trading horizon DHP Korea Co is expected to generate 1.09 times more return on investment than Aprogen Healthcare. However, DHP Korea is 1.09 times more volatile than Aprogen Healthcare Games. It trades about 0.1 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.02 per unit of risk. If you would invest  560,000  in DHP Korea Co on September 27, 2024 and sell it today you would earn a total of  67,000  from holding DHP Korea Co or generate 11.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DHP Korea Co  vs.  Aprogen Healthcare Games

DHP Korea

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DHP Korea Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen Healthcare Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Aprogen Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DHP Korea and Aprogen Healthcare

The main advantage of trading using opposite DHP Korea and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DHP Korea position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.

The idea behind DHP Korea Co and Aprogen Healthcare Games 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.