Correlation Between Daiyang Metal and Pyung Hwa
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and Pyung Hwa 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 Pyung Hwa 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 Pyung Hwa Industrial, you can compare the effects of market volatilities on Daiyang Metal and Pyung Hwa 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 Pyung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Pyung Hwa.
Diversification Opportunities for Daiyang Metal and Pyung Hwa
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daiyang and Pyung is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Pyung Hwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyung Hwa Industrial 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 Pyung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyung Hwa Industrial has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Pyung Hwa go up and down completely randomly.
Pair Corralation between Daiyang Metal and Pyung Hwa
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the Pyung Hwa. In addition to that, Daiyang Metal is 1.69 times more volatile than Pyung Hwa Industrial. It trades about -0.01 of its total potential returns per unit of risk. Pyung Hwa Industrial is currently generating about 0.01 per unit of volatility. If you would invest 121,200 in Pyung Hwa Industrial on November 21, 2024 and sell it today you would lose (5,100) from holding Pyung Hwa Industrial or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.96% |
| Values | Daily Returns |
Daiyang Metal Co vs. Pyung Hwa Industrial
Performance |
| Timeline |
| Daiyang Metal |
| Pyung Hwa Industrial |
Daiyang Metal and Pyung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Pyung Hwa
The main advantage of trading using opposite Daiyang Metal and Pyung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, Pyung Hwa 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 Pyung Hwa will offset losses from the drop in Pyung Hwa's long position.| Daiyang Metal vs. Korean Air Lines | Daiyang Metal vs. Seoyon Topmetal Co | Daiyang Metal vs. Daishin Information Communications | Daiyang Metal vs. Sangsin Energy Display |
| Pyung Hwa vs. Aprogen Healthcare Games | Pyung Hwa vs. Next Entertainment World | Pyung Hwa vs. MEDIANA CoLtd | Pyung Hwa vs. Digital Multimedia Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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