Correlation Between Daeduck Electronics and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Daeduck Electronics and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Kyung Chang.
Diversification Opportunities for Daeduck Electronics and Kyung Chang
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daeduck and Kyung is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and Kyung Chang go up and down completely randomly.
Pair Corralation between Daeduck Electronics and Kyung Chang
Assuming the 90 days trading horizon Daeduck Electronics is expected to generate 2.21 times less return on investment than Kyung Chang. But when comparing it to its historical volatility, Daeduck Electronics Co is 2.33 times less risky than Kyung Chang. It trades about 0.13 of its potential returns per unit of risk. Kyung Chang Industrial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 196,300 in Kyung Chang Industrial on September 15, 2024 and sell it today you would earn a total of 12,200 from holding Kyung Chang Industrial or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daeduck Electronics Co vs. Kyung Chang Industrial
Performance |
| Timeline |
| Daeduck Electronics |
| Kyung Chang Industrial |
Daeduck Electronics and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and Kyung Chang
The main advantage of trading using opposite Daeduck Electronics and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| Daeduck Electronics vs. Samsung Electronics Co | Daeduck Electronics vs. Samsung Electronics Co | Daeduck Electronics vs. SK Hynix | Daeduck Electronics vs. POSCO Holdings |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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