Correlation Between Daiyang Metal and Insung Information
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Daiyang Metal and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Insung Information.
Diversification Opportunities for Daiyang Metal and Insung Information
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daiyang and Insung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Insung Information go up and down completely randomly.
Pair Corralation between Daiyang Metal and Insung Information
Assuming the 90 days trading horizon Daiyang Metal is expected to generate 1.98 times less return on investment than Insung Information. But when comparing it to its historical volatility, Daiyang Metal Co is 1.42 times less risky than Insung Information. It trades about 0.15 of its potential returns per unit of risk. Insung Information Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 162,400 in Insung Information Co on January 25, 2025 and sell it today you would earn a total of 60,100 from holding Insung Information Co or generate 37.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. Insung Information Co
Performance |
| Timeline |
| Daiyang Metal |
| Insung Information |
Daiyang Metal and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Insung Information
The main advantage of trading using opposite Daiyang Metal and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Daiyang Metal vs. AptaBio Therapeutics | Daiyang Metal vs. Daewoo SBI SPAC | Daiyang Metal vs. Dream Security co | Daiyang Metal vs. Microfriend |
| Insung Information vs. Hyundai Green Food | Insung Information vs. Seoul Food Industrial | Insung Information vs. Keum Kang Steel | Insung Information vs. FOODWELL 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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