Correlation Between Daeduck Electronics and N2Tech
Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and N2Tech 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 N2Tech 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 N2Tech Co, you can compare the effects of market volatilities on Daeduck Electronics and N2Tech 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 N2Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and N2Tech.
Diversification Opportunities for Daeduck Electronics and N2Tech
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daeduck and N2Tech is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and N2Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N2Tech 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 N2Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N2Tech has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and N2Tech go up and down completely randomly.
Pair Corralation between Daeduck Electronics and N2Tech
Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.4 times more return on investment than N2Tech. However, Daeduck Electronics Co is 2.51 times less risky than N2Tech. It trades about 0.06 of its potential returns per unit of risk. N2Tech Co is currently generating about -0.04 per unit of risk. If you would invest 670,000 in Daeduck Electronics Co on October 30, 2024 and sell it today you would earn a total of 12,000 from holding Daeduck Electronics Co or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daeduck Electronics Co vs. N2Tech Co
Performance |
| Timeline |
| Daeduck Electronics |
| N2Tech |
Daeduck Electronics and N2Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daeduck Electronics and N2Tech
The main advantage of trading using opposite Daeduck Electronics and N2Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, N2Tech 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 N2Tech will offset losses from the drop in N2Tech's long position.| Daeduck Electronics vs. KB Financial Group | Daeduck Electronics vs. Shinhan Financial Group | Daeduck Electronics vs. Hana Financial | Daeduck Electronics vs. Woori Financial Group |
| N2Tech vs. Dongnam Chemical Co | N2Tech vs. Daewon Media Co | N2Tech vs. Kukdong Oil Chemicals | N2Tech vs. Miwon Chemical |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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