Correlation Between Daeduck Electronics and Hwashin Precision
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and Hwashin Precision 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 Hwashin Precision 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 Hwashin Precision Engineering, you can compare the effects of market volatilities on Daeduck Electronics and Hwashin Precision 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 Hwashin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Hwashin Precision.
Diversification Opportunities for Daeduck Electronics and Hwashin Precision
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daeduck and Hwashin is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Hwashin Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwashin Precision 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 Hwashin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwashin Precision has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and Hwashin Precision go up and down completely randomly.
Pair Corralation between Daeduck Electronics and Hwashin Precision
Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.66 times more return on investment than Hwashin Precision. However, Daeduck Electronics Co is 1.51 times less risky than Hwashin Precision. It trades about 0.0 of its potential returns per unit of risk. Hwashin Precision Engineering is currently generating about -0.03 per unit of risk. If you would invest 671,000 in Daeduck Electronics Co on September 3, 2024 and sell it today you would lose (1,000.00) from holding Daeduck Electronics Co or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. Hwashin Precision Engineering
Performance |
| Timeline |
| Daeduck Electronics |
| Hwashin Precision |
Daeduck Electronics and Hwashin Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and Hwashin Precision
The main advantage of trading using opposite Daeduck Electronics and Hwashin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, Hwashin Precision 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 Hwashin Precision will offset losses from the drop in Hwashin Precision'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 |
| Hwashin Precision vs. PI Advanced Materials | Hwashin Precision vs. Daeduck Electronics Co | Hwashin Precision vs. Sunny Electronics Corp | Hwashin Precision vs. Iljin Materials 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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