Correlation Between Namyang Dairy and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy and DAEDUCK ELECTRONICS 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 Namyang Dairy and DAEDUCK ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Namyang Dairy and DAEDUCK ELECTRONICS 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 Namyang Dairy with a short position of DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and DAEDUCK ELECTRONICS.
Diversification Opportunities for Namyang Dairy and DAEDUCK ELECTRONICS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Namyang and DAEDUCK is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd and Namyang Dairy 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 Namyang Dairy are associated (or correlated) with DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Namyang Dairy i.e., Namyang Dairy and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Namyang Dairy and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 84.92 times more return on investment than DAEDUCK ELECTRONICS. However, Namyang Dairy is 84.92 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.12 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.04 per unit of risk. If you would invest 4,930,000 in Namyang Dairy on September 2, 2024 and sell it today you would earn a total of 1,880,000 from holding Namyang Dairy or generate 38.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Namyang Dairy vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Namyang Dairy |
| DAEDUCK ELECTRONICS CoLtd |
Namyang Dairy and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Namyang Dairy and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| Namyang Dairy vs. Korea Real Estate | Namyang Dairy vs. Korea Ratings Co | Namyang Dairy vs. IQuest Co | Namyang Dairy vs. Wonbang Tech Co |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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