Correlation Between Daiyang Metal and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and Atinum Investment 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 Daiyang Metal and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and Atinum Investment Co, you can compare the effects of market volatilities on Daiyang Metal and Atinum Investment 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 Daiyang Metal with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Atinum Investment.
Diversification Opportunities for Daiyang Metal and Atinum Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daiyang and Atinum is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Atinum Investment go up and down completely randomly.
Pair Corralation between Daiyang Metal and Atinum Investment
Assuming the 90 days trading horizon Daiyang Metal Co is expected to generate 2.05 times more return on investment than Atinum Investment. However, Daiyang Metal is 2.05 times more volatile than Atinum Investment Co. It trades about 0.24 of its potential returns per unit of risk. Atinum Investment Co is currently generating about 0.16 per unit of risk. If you would invest 141,000 in Daiyang Metal Co on January 26, 2025 and sell it today you would earn a total of 51,000 from holding Daiyang Metal Co or generate 36.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. Atinum Investment Co
Performance |
| Timeline |
| Daiyang Metal |
| Atinum Investment |
Daiyang Metal and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Atinum Investment
The main advantage of trading using opposite Daiyang Metal and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Daiyang Metal vs. Dongbang Transport Logistics | Daiyang Metal vs. LG Household Healthcare | Daiyang Metal vs. Aprogen Healthcare Games | Daiyang Metal vs. Hankook Furniture Co |
| Atinum Investment vs. Daedong Metals Co | Atinum Investment vs. Hanjoo Light Metal | Atinum Investment vs. KB Financial Group | Atinum Investment vs. InfoBank |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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