Correlation Between Daeduck Electronics and Hanil Iron
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and Hanil Iron 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 Daeduck Electronics and Hanil Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daeduck Electronics Co and Hanil Iron Steel, you can compare the effects of market volatilities on Daeduck Electronics and Hanil Iron 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 Daeduck Electronics with a short position of Hanil Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Hanil Iron.
Diversification Opportunities for Daeduck Electronics and Hanil Iron
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daeduck and Hanil is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Hanil Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Iron Steel and Daeduck Electronics 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 Daeduck Electronics Co are associated (or correlated) with Hanil Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Iron Steel has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and Hanil Iron go up and down completely randomly.
Pair Corralation between Daeduck Electronics and Hanil Iron
Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.44 times more return on investment than Hanil Iron. However, Daeduck Electronics Co is 2.28 times less risky than Hanil Iron. It trades about 0.06 of its potential returns per unit of risk. Hanil Iron Steel is currently generating about -0.04 per unit of risk. If you would invest 630,000 in Daeduck Electronics Co on September 3, 2024 and sell it today you would earn a total of 40,000 from holding Daeduck Electronics Co or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. Hanil Iron Steel
Performance |
| Timeline |
| Daeduck Electronics |
| Hanil Iron Steel |
Daeduck Electronics and Hanil Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and Hanil Iron
The main advantage of trading using opposite Daeduck Electronics and Hanil Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, Hanil Iron 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 Hanil Iron will offset losses from the drop in Hanil Iron's long position.| Daeduck Electronics vs. Kukil Metal Co | Daeduck Electronics vs. Display Tech Co | Daeduck Electronics vs. Seoyon Topmetal Co | Daeduck Electronics vs. Formetal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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