Correlation Between Duksan Hi and Green Cross

Can any of the company-specific risk be diversified away by investing in both Duksan Hi and Green Cross 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 Duksan Hi and Green Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Duksan Hi Metal and Green Cross Medical, you can compare the effects of market volatilities on Duksan Hi and Green Cross 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 Duksan Hi with a short position of Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duksan Hi and Green Cross.

Diversification Opportunities for Duksan Hi and Green Cross

0.49

Correlation Coefficient

Duksan Hi  Green Cross

Very weak diversification

The 3 months correlation between Duksan and Green is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Duksan Hi Metal and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical and Duksan Hi 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 Duksan Hi Metal are associated (or correlated) with Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of Duksan Hi i.e., Duksan Hi and Green Cross go up and down completely randomly.

Pair Corralation between Duksan Hi and Green Cross

Assuming the 90 days trading horizon Duksan Hi Metal is expected to generate 0.83 times more return on investment than Green Cross. However, Duksan Hi Metal is 1.21 times less risky than Green Cross. It trades about 0.1 of its potential returns per unit of risk. Green Cross Medical is currently generating about 0.07 per unit of risk. If you would invest  359,000  in Duksan Hi Metal on December 4, 2024 and sell it today you would earn a total of  54,000  from holding Duksan Hi Metal or generate 15.04% return on investment over 90 days.

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

Duksan Hi Metal  vs.  Green Cross Medical

Duksan Hi Metal

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Duksan Hi Metal are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Duksan Hi sustained solid returns over the last few months and may actually be approaching a breakup point.

Green Cross Medical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Green Cross Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Green Cross sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duksan Hi and Green Cross

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

The idea behind Duksan Hi Metal and Green Cross Medical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.