Correlation Between Daelim Industrial and Pyung Hwa
Can any of the company-specific risk be diversified away by investing in both Daelim Industrial and Pyung Hwa 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 Pyung Hwa 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 Pyung Hwa Industrial, you can compare the effects of market volatilities on Daelim Industrial and Pyung Hwa 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 Pyung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Industrial and Pyung Hwa.
Diversification Opportunities for Daelim Industrial and Pyung Hwa
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daelim and Pyung is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Industrial Co and Pyung Hwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyung Hwa Industrial 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 Pyung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyung Hwa Industrial has no effect on the direction of Daelim Industrial i.e., Daelim Industrial and Pyung Hwa go up and down completely randomly.
Pair Corralation between Daelim Industrial and Pyung Hwa
Assuming the 90 days trading horizon Daelim Industrial is expected to generate 2.14 times less return on investment than Pyung Hwa. But when comparing it to its historical volatility, Daelim Industrial Co is 7.08 times less risky than Pyung Hwa. It trades about 0.03 of its potential returns per unit of risk. Pyung Hwa Industrial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 127,700 in Pyung Hwa Industrial on November 28, 2024 and sell it today you would lose (3,700) from holding Pyung Hwa Industrial or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Industrial Co vs. Pyung Hwa Industrial
Performance |
| Timeline |
| Daelim Industrial |
| Pyung Hwa Industrial |
Daelim Industrial and Pyung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Industrial and Pyung Hwa
The main advantage of trading using opposite Daelim Industrial and Pyung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Industrial position performs unexpectedly, Pyung Hwa 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 Pyung Hwa will offset losses from the drop in Pyung Hwa'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 |
| Pyung Hwa vs. AptaBio Therapeutics | Pyung Hwa vs. Daewoo SBI SPAC | Pyung Hwa vs. Dream Security co | Pyung Hwa vs. Microfriend |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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