Correlation Between Daelim Trading and Korea Ratings
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Korea Ratings 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 Trading and Korea Ratings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Korea Ratings Co, you can compare the effects of market volatilities on Daelim Trading and Korea Ratings 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 Trading with a short position of Korea Ratings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Korea Ratings.
Diversification Opportunities for Daelim Trading and Korea Ratings
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daelim and Korea is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Korea Ratings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Ratings and Daelim Trading 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 Trading Co are associated (or correlated) with Korea Ratings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Ratings has no effect on the direction of Daelim Trading i.e., Daelim Trading and Korea Ratings go up and down completely randomly.
Pair Corralation between Daelim Trading and Korea Ratings
Assuming the 90 days trading horizon Daelim Trading Co is expected to under-perform the Korea Ratings. In addition to that, Daelim Trading is 3.1 times more volatile than Korea Ratings Co. It trades about -0.1 of its total potential returns per unit of risk. Korea Ratings Co is currently generating about 0.21 per unit of volatility. If you would invest 8,500,000 in Korea Ratings Co on September 14, 2024 and sell it today you would earn a total of 320,000 from holding Korea Ratings Co or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Korea Ratings Co
Performance |
| Timeline |
| Daelim Trading |
| Korea Ratings |
Daelim Trading and Korea Ratings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Korea Ratings
The main advantage of trading using opposite Daelim Trading and Korea Ratings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Korea Ratings 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 Korea Ratings will offset losses from the drop in Korea Ratings' long position.| Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. SK Hynix | Daelim Trading vs. POSCO Holdings |
| Korea Ratings vs. Haesung Industrial Co | Korea Ratings vs. Korean Drug Co | Korea Ratings vs. Seoyon Topmetal Co | Korea Ratings vs. Sewoon Medical 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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