Correlation Between Eagon Industrial and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and DIGITAL CHOSUN 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 Eagon Industrial and DIGITAL CHOSUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and DIGITAL CHOSUN, you can compare the effects of market volatilities on Eagon Industrial and DIGITAL CHOSUN 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 Eagon Industrial with a short position of DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and DIGITAL CHOSUN.
Diversification Opportunities for Eagon Industrial and DIGITAL CHOSUN
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eagon and DIGITAL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Eagon Industrial and DIGITAL CHOSUN
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 1.05 times more return on investment than DIGITAL CHOSUN. However, Eagon Industrial is 1.05 times more volatile than DIGITAL CHOSUN. It trades about 0.02 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.01 per unit of risk. If you would invest 524,712 in Eagon Industrial Co on November 7, 2024 and sell it today you would earn a total of 12,288 from holding Eagon Industrial Co or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Eagon Industrial Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Eagon Industrial |
| DIGITAL CHOSUN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eagon Industrial and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and DIGITAL CHOSUN
The main advantage of trading using opposite Eagon Industrial and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Eagon Industrial vs. Mirai Semiconductors Co | Eagon Industrial vs. Korea Air Svc | Eagon Industrial vs. MetaLabs Co | Eagon Industrial vs. Formetal Co |
| DIGITAL CHOSUN vs. Sempio Foods Co | DIGITAL CHOSUN vs. Daishin Information Communications | DIGITAL CHOSUN vs. CKH Food Health | DIGITAL CHOSUN vs. Samlip General Foods |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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