Correlation Between Daeduck Electronics and Wave Electronics
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and Wave Electronics 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 Wave Electronics 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 Wave Electronics Co, you can compare the effects of market volatilities on Daeduck Electronics and Wave Electronics 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 Wave Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Wave Electronics.
Diversification Opportunities for Daeduck Electronics and Wave Electronics
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daeduck and Wave is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Wave Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wave Electronics 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 Wave Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wave Electronics has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and Wave Electronics go up and down completely randomly.
Pair Corralation between Daeduck Electronics and Wave Electronics
Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.33 times more return on investment than Wave Electronics. However, Daeduck Electronics Co is 3.05 times less risky than Wave Electronics. It trades about 0.02 of its potential returns per unit of risk. Wave Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 639,000 in Daeduck Electronics Co on September 25, 2024 and sell it today you would earn a total of 33,000 from holding Daeduck Electronics Co or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. Wave Electronics Co
Performance |
| Timeline |
| Daeduck Electronics |
| Wave Electronics |
Daeduck Electronics and Wave Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and Wave Electronics
The main advantage of trading using opposite Daeduck Electronics and Wave Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, Wave Electronics 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 Wave Electronics will offset losses from the drop in Wave Electronics' long position.| Daeduck Electronics vs. Hyundai Green Food | Daeduck Electronics vs. Dongil Metal Co | Daeduck Electronics vs. Sempio Foods Co | Daeduck Electronics vs. Kyeryong Construction Industrial |
| Wave Electronics vs. Dongsin Engineering Construction | Wave Electronics vs. Doosan Fuel Cell | Wave Electronics vs. Daishin Balance 1 | Wave Electronics vs. Total Soft Bank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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