Correlation Between DAEDUCK ELECTRONICS and Hansol Chemica
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and Hansol Chemica 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 Hansol Chemica 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 Hansol Chemica, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and Hansol Chemica 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 Hansol Chemica. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Hansol Chemica.
Diversification Opportunities for DAEDUCK ELECTRONICS and Hansol Chemica
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAEDUCK and Hansol is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Hansol Chemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Chemica 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 Hansol Chemica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Chemica has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Hansol Chemica go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Hansol Chemica
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.53 times more return on investment than Hansol Chemica. However, DAEDUCK ELECTRONICS CoLtd is 1.87 times less risky than Hansol Chemica. It trades about -0.13 of its potential returns per unit of risk. Hansol Chemica is currently generating about -0.13 per unit of risk. If you would invest 841,000 in DAEDUCK ELECTRONICS CoLtd on September 12, 2024 and sell it today you would lose (105,000) from holding DAEDUCK ELECTRONICS CoLtd or give up 12.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Hansol Chemica
Performance |
Timeline |
DAEDUCK ELECTRONICS CoLtd |
Hansol Chemica |
DAEDUCK ELECTRONICS and Hansol Chemica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DAEDUCK ELECTRONICS and Hansol Chemica
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Hansol Chemica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, Hansol Chemica 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 Hansol Chemica will offset losses from the drop in Hansol Chemica's long position.DAEDUCK ELECTRONICS vs. Korea Computer | DAEDUCK ELECTRONICS vs. Duksan Hi Metal | DAEDUCK ELECTRONICS vs. LG Display Co | DAEDUCK ELECTRONICS vs. Shinsegae Information Communication |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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