Correlation Between Daiyang Metal and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and MEDIPOST 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 MEDIPOST 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 MEDIPOST Co, you can compare the effects of market volatilities on Daiyang Metal and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and MEDIPOST.
Diversification Opportunities for Daiyang Metal and MEDIPOST
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daiyang and MEDIPOST is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and MEDIPOST go up and down completely randomly.
Pair Corralation between Daiyang Metal and MEDIPOST
Assuming the 90 days trading horizon Daiyang Metal Co is expected to generate 0.43 times more return on investment than MEDIPOST. However, Daiyang Metal Co is 2.3 times less risky than MEDIPOST. It trades about -0.11 of its potential returns per unit of risk. MEDIPOST Co is currently generating about -0.18 per unit of risk. If you would invest 172,000 in Daiyang Metal Co on October 14, 2024 and sell it today you would lose (10,200) from holding Daiyang Metal Co or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. MEDIPOST Co
Performance |
| Timeline |
| Daiyang Metal |
| MEDIPOST |
Daiyang Metal and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and MEDIPOST
The main advantage of trading using opposite Daiyang Metal and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST's long position.| Daiyang Metal vs. Foodnamoo | Daiyang Metal vs. LG Display Co | Daiyang Metal vs. FOODWELL Co | Daiyang Metal vs. GS Retail Co |
| MEDIPOST vs. Daewon Chemical Co | MEDIPOST vs. Hanwha Chemical Corp | MEDIPOST vs. Daiyang Metal Co | MEDIPOST vs. DONGKUK TED METAL |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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