Correlation Between Daiyang Metal and CS BEARING
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and CS BEARING 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 CS BEARING 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 CS BEARING CoLtd, you can compare the effects of market volatilities on Daiyang Metal and CS BEARING 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 CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and CS BEARING.
Diversification Opportunities for Daiyang Metal and CS BEARING
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daiyang and 297090 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd 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 CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and CS BEARING go up and down completely randomly.
Pair Corralation between Daiyang Metal and CS BEARING
Assuming the 90 days trading horizon Daiyang Metal Co is expected to generate 0.67 times more return on investment than CS BEARING. However, Daiyang Metal Co is 1.5 times less risky than CS BEARING. It trades about -0.02 of its potential returns per unit of risk. CS BEARING CoLtd is currently generating about -0.16 per unit of risk. If you would invest 162,900 in Daiyang Metal Co on September 12, 2024 and sell it today you would lose (3,400) from holding Daiyang Metal Co or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. CS BEARING CoLtd
Performance |
| Timeline |
| Daiyang Metal |
| CS BEARING CoLtd |
Daiyang Metal and CS BEARING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and CS BEARING
The main advantage of trading using opposite Daiyang Metal and CS BEARING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, CS BEARING 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 CS BEARING will offset losses from the drop in CS BEARING's long position.| Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. Samsung Electronics Co | Daiyang Metal vs. SK Hynix | Daiyang Metal vs. POSCO Holdings |
| CS BEARING vs. SBI Investment KOREA | CS BEARING vs. Lotte Data Communication | CS BEARING vs. Coloray International Investment | CS BEARING vs. DSC Investment |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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