Correlation Between Daehan Synthetic and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and BGF Retail 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 Daehan Synthetic and BGF Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and BGF Retail Co, you can compare the effects of market volatilities on Daehan Synthetic and BGF Retail 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 Daehan Synthetic with a short position of BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and BGF Retail.
Diversification Opportunities for Daehan Synthetic and BGF Retail
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daehan and BGF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and BGF Retail go up and down completely randomly.
Pair Corralation between Daehan Synthetic and BGF Retail
Assuming the 90 days trading horizon Daehan Synthetic Fiber is expected to generate 0.7 times more return on investment than BGF Retail. However, Daehan Synthetic Fiber is 1.44 times less risky than BGF Retail. It trades about 0.03 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.04 per unit of risk. If you would invest 11,150,000 in Daehan Synthetic Fiber on August 25, 2024 and sell it today you would earn a total of 480,000 from holding Daehan Synthetic Fiber or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. BGF Retail Co
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| BGF Retail |
Daehan Synthetic and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and BGF Retail
The main advantage of trading using opposite Daehan Synthetic and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Daehan Synthetic vs. Pan Entertainment Co | Daehan Synthetic vs. Nasmedia Co | Daehan Synthetic vs. LG Chemicals | Daehan Synthetic vs. Taegu Broadcasting |
| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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