Correlation Between GS Engineering and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Daelim Trading 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 GS Engineering and Daelim Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Daelim Trading Co, you can compare the effects of market volatilities on GS Engineering and Daelim Trading 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 GS Engineering with a short position of Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Daelim Trading.
Diversification Opportunities for GS Engineering and Daelim Trading
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 006360 and Daelim is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of GS Engineering i.e., GS Engineering and Daelim Trading go up and down completely randomly.
Pair Corralation between GS Engineering and Daelim Trading
Assuming the 90 days trading horizon GS Engineering Construction is expected to under-perform the Daelim Trading. In addition to that, GS Engineering is 1.36 times more volatile than Daelim Trading Co. It trades about -0.08 of its total potential returns per unit of risk. Daelim Trading Co is currently generating about -0.05 per unit of volatility. If you would invest 261,500 in Daelim Trading Co on October 25, 2024 and sell it today you would lose (4,000) from holding Daelim Trading Co or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Daelim Trading Co
Performance |
| Timeline |
| GS Engineering Const |
| Daelim Trading |
GS Engineering and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Daelim Trading
The main advantage of trading using opposite GS Engineering and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| GS Engineering vs. KB Financial Group | GS Engineering vs. Shinhan Financial Group | GS Engineering vs. Hana Financial | GS Engineering vs. Woori Financial Group |
| Daelim Trading vs. LG Household Healthcare | Daelim Trading vs. Green Cross Medical | Daelim Trading vs. Seoul Electronics Telecom | Daelim Trading vs. Samyoung Electronics 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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