Correlation Between Daeduck Electronics and HMM
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and HMM 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 HMM 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 HMM Co, you can compare the effects of market volatilities on Daeduck Electronics and HMM 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 HMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and HMM.
Diversification Opportunities for Daeduck Electronics and HMM
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daeduck and HMM is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and HMM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMM Co 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 HMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMM Co has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and HMM go up and down completely randomly.
Pair Corralation between Daeduck Electronics and HMM
Assuming the 90 days trading horizon Daeduck Electronics is expected to generate 3.81 times less return on investment than HMM. But when comparing it to its historical volatility, Daeduck Electronics Co is 2.85 times less risky than HMM. It trades about 0.0 of its potential returns per unit of risk. HMM Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,999,522 in HMM Co on September 3, 2024 and sell it today you would lose (203,522) from holding HMM Co or give up 10.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. HMM Co
Performance |
| Timeline |
| Daeduck Electronics |
| HMM Co |
Daeduck Electronics and HMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and HMM
The main advantage of trading using opposite Daeduck Electronics and HMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, HMM 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 HMM will offset losses from the drop in HMM'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 |
| HMM vs. Daeduck Electronics Co | HMM vs. DB Financial Investment | HMM vs. Shinil Electronics Co | HMM 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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