Correlation Between Daewoo Electronic and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Daewoo Electronic and Korea Shipbuilding 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 Daewoo Electronic and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Electronic Components and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Daewoo Electronic and Korea Shipbuilding 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 Daewoo Electronic with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Electronic and Korea Shipbuilding.
Diversification Opportunities for Daewoo Electronic and Korea Shipbuilding
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daewoo and Korea is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Electronic Components and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and Daewoo Electronic 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 Daewoo Electronic Components are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Daewoo Electronic i.e., Daewoo Electronic and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Daewoo Electronic and Korea Shipbuilding
Assuming the 90 days trading horizon Daewoo Electronic Components is expected to generate 0.21 times more return on investment than Korea Shipbuilding. However, Daewoo Electronic Components is 4.86 times less risky than Korea Shipbuilding. It trades about 0.12 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.02 per unit of risk. If you would invest 100,400 in Daewoo Electronic Components on October 29, 2024 and sell it today you would earn a total of 1,100 from holding Daewoo Electronic Components or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Electronic Components vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Daewoo Electronic |
| Korea Shipbuilding |
Daewoo Electronic and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Electronic and Korea Shipbuilding
The main advantage of trading using opposite Daewoo Electronic and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Electronic position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Daewoo Electronic vs. Digital Power Communications | Daewoo Electronic vs. BIT Computer Co | Daewoo Electronic vs. Lotte Non Life Insurance | Daewoo Electronic vs. Daesung Hi Tech Co |
| Korea Shipbuilding vs. Daiyang Metal Co | Korea Shipbuilding vs. Vissem Electronics Co | Korea Shipbuilding vs. Shinil Electronics Co | Korea Shipbuilding vs. Daejung Chemicals Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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