Correlation Between Soulbrain Holdings and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both Soulbrain Holdings and Dongjin Semichem 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 Soulbrain Holdings and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soulbrain Holdings Co and Dongjin Semichem Co, you can compare the effects of market volatilities on Soulbrain Holdings and Dongjin Semichem 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 Soulbrain Holdings with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and Dongjin Semichem.
Diversification Opportunities for Soulbrain Holdings and Dongjin Semichem
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Soulbrain and Dongjin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and Soulbrain Holdings 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 Soulbrain Holdings Co are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of Soulbrain Holdings i.e., Soulbrain Holdings and Dongjin Semichem go up and down completely randomly.
Pair Corralation between Soulbrain Holdings and Dongjin Semichem
Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to generate 1.44 times more return on investment than Dongjin Semichem. However, Soulbrain Holdings is 1.44 times more volatile than Dongjin Semichem Co. It trades about 0.04 of its potential returns per unit of risk. Dongjin Semichem Co is currently generating about -0.27 per unit of risk. If you would invest 4,010,000 in Soulbrain Holdings Co on September 24, 2024 and sell it today you would earn a total of 90,000 from holding Soulbrain Holdings Co or generate 2.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Soulbrain Holdings Co vs. Dongjin Semichem Co
Performance |
Timeline |
Soulbrain Holdings |
Dongjin Semichem |
Soulbrain Holdings and Dongjin Semichem Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Soulbrain Holdings and Dongjin Semichem
The main advantage of trading using opposite Soulbrain Holdings and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soulbrain Holdings position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.Soulbrain Holdings vs. LG Chemicals | Soulbrain Holdings vs. POSCO Holdings | Soulbrain Holdings vs. Hanwha Solutions | Soulbrain Holdings vs. Lotte Chemical Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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