Correlation Between Daiyang Metal and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and SK Chemicals 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 Daiyang Metal and SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and SK Chemicals Co, you can compare the effects of market volatilities on Daiyang Metal and SK Chemicals 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 Daiyang Metal with a short position of SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and SK Chemicals.
Diversification Opportunities for Daiyang Metal and SK Chemicals
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daiyang and 28513K is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and SK Chemicals go up and down completely randomly.
Pair Corralation between Daiyang Metal and SK Chemicals
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the SK Chemicals. In addition to that, Daiyang Metal is 1.24 times more volatile than SK Chemicals Co. It trades about -0.03 of its total potential returns per unit of risk. SK Chemicals Co is currently generating about 0.04 per unit of volatility. If you would invest 1,965,000 in SK Chemicals Co on October 4, 2024 and sell it today you would earn a total of 26,000 from holding SK Chemicals Co or generate 1.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Daiyang Metal Co vs. SK Chemicals Co
Performance |
Timeline |
Daiyang Metal |
SK Chemicals |
Daiyang Metal and SK Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daiyang Metal and SK Chemicals
The main advantage of trading using opposite Daiyang Metal and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.Daiyang Metal vs. AptaBio Therapeutics | Daiyang Metal vs. Daewoo SBI SPAC | Daiyang Metal vs. Dream Security co | Daiyang Metal vs. Microfriend |
SK Chemicals vs. Polaris Office Corp | SK Chemicals vs. Songwon Industrial Co | SK Chemicals vs. LEENO Industrial | SK Chemicals vs. Eagon Industrial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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