Correlation Between Daiyang Metal and DRGEM
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and DRGEM 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 DRGEM 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 DRGEM, you can compare the effects of market volatilities on Daiyang Metal and DRGEM 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 DRGEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and DRGEM.
Diversification Opportunities for Daiyang Metal and DRGEM
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daiyang and DRGEM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and DRGEM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRGEM 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 DRGEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRGEM has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and DRGEM go up and down completely randomly.
Pair Corralation between Daiyang Metal and DRGEM
Assuming the 90 days trading horizon Daiyang Metal Co is expected to generate 2.79 times more return on investment than DRGEM. However, Daiyang Metal is 2.79 times more volatile than DRGEM. It trades about -0.01 of its potential returns per unit of risk. DRGEM is currently generating about -0.04 per unit of risk. If you would invest 335,000 in Daiyang Metal Co on September 3, 2024 and sell it today you would lose (188,100) from holding Daiyang Metal Co or give up 56.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.96% |
| Values | Daily Returns |
Daiyang Metal Co vs. DRGEM
Performance |
| Timeline |
| Daiyang Metal |
| DRGEM |
Daiyang Metal and DRGEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and DRGEM
The main advantage of trading using opposite Daiyang Metal and DRGEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, DRGEM 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 DRGEM will offset losses from the drop in DRGEM's long position.| Daiyang Metal vs. AptaBio Therapeutics | Daiyang Metal vs. Daewoo SBI SPAC | Daiyang Metal vs. Dream Security co | Daiyang Metal vs. Microfriend |
| DRGEM vs. Namhwa Industrial Co | DRGEM vs. Jeong Moon Information | DRGEM vs. Tway Air Co | DRGEM vs. Daiyang Metal 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |