Correlation Between Daelim Industrial and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Daelim Industrial and PLAYWITH 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 Daelim Industrial and PLAYWITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Industrial Co and PLAYWITH, you can compare the effects of market volatilities on Daelim Industrial and PLAYWITH 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 Daelim Industrial with a short position of PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Industrial and PLAYWITH.
Diversification Opportunities for Daelim Industrial and PLAYWITH
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daelim and PLAYWITH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Industrial Co and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH and Daelim Industrial 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 Daelim Industrial Co are associated (or correlated) with PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Daelim Industrial i.e., Daelim Industrial and PLAYWITH go up and down completely randomly.
Pair Corralation between Daelim Industrial and PLAYWITH
Assuming the 90 days trading horizon Daelim Industrial Co is expected to generate 0.57 times more return on investment than PLAYWITH. However, Daelim Industrial Co is 1.74 times less risky than PLAYWITH. It trades about -0.3 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.2 per unit of risk. If you would invest 2,310,000 in Daelim Industrial Co on September 3, 2024 and sell it today you would lose (230,000) from holding Daelim Industrial Co or give up 9.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Industrial Co vs. PLAYWITH
Performance |
| Timeline |
| Daelim Industrial |
| PLAYWITH |
Daelim Industrial and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Industrial and PLAYWITH
The main advantage of trading using opposite Daelim Industrial and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Industrial position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| Daelim Industrial vs. Samsung Electronics Co | Daelim Industrial vs. Samsung Electronics Co | Daelim Industrial vs. LG Energy Solution | Daelim Industrial vs. SK Hynix |
| PLAYWITH vs. Korea New Network | PLAYWITH vs. ICD Co | PLAYWITH vs. DYPNF CoLtd | PLAYWITH vs. Busan 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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