Correlation Between Daelim Industrial and Total Soft
Can any of the company-specific risk be diversified away by investing in both Daelim Industrial and Total Soft 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 Total Soft 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 Total Soft Bank, you can compare the effects of market volatilities on Daelim Industrial and Total Soft 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 Total Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Industrial and Total Soft.
Diversification Opportunities for Daelim Industrial and Total Soft
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daelim and Total is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Industrial Co and Total Soft Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Soft Bank 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 Total Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Soft Bank has no effect on the direction of Daelim Industrial i.e., Daelim Industrial and Total Soft go up and down completely randomly.
Pair Corralation between Daelim Industrial and Total Soft
Assuming the 90 days trading horizon Daelim Industrial Co is expected to under-perform the Total Soft. But the stock apears to be less risky and, when comparing its historical volatility, Daelim Industrial Co is 1.27 times less risky than Total Soft. The stock trades about -0.1 of its potential returns per unit of risk. The Total Soft Bank is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 559,000 in Total Soft Bank on August 24, 2024 and sell it today you would lose (123,000) from holding Total Soft Bank or give up 22.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Industrial Co vs. Total Soft Bank
Performance |
| Timeline |
| Daelim Industrial |
| Total Soft Bank |
Daelim Industrial and Total Soft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Industrial and Total Soft
The main advantage of trading using opposite Daelim Industrial and Total Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Industrial position performs unexpectedly, Total Soft 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 Total Soft will offset losses from the drop in Total Soft'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 |
| Total Soft vs. Busan Industrial Co | Total Soft vs. Sejong Industrial | Total Soft vs. SK Chemicals Co | Total Soft vs. Daelim 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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