Correlation Between Daewoo Electronic and Xavis
Can any of the company-specific risk be diversified away by investing in both Daewoo Electronic and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on Daewoo Electronic and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Electronic and Xavis.
Diversification Opportunities for Daewoo Electronic and Xavis
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and Xavis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Electronic Components and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Daewoo Electronic i.e., Daewoo Electronic and Xavis go up and down completely randomly.
Pair Corralation between Daewoo Electronic and Xavis
Assuming the 90 days trading horizon Daewoo Electronic Components is expected to under-perform the Xavis. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo Electronic Components is 5.68 times less risky than Xavis. The stock trades about -0.25 of its potential returns per unit of risk. The Xavis Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 137,600 in Xavis Co on November 7, 2024 and sell it today you would earn a total of 5,400 from holding Xavis Co or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Daewoo Electronic Components vs. Xavis Co
Performance |
| Timeline |
| Daewoo Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xavis |
Daewoo Electronic and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Electronic and Xavis
The main advantage of trading using opposite Daewoo Electronic and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Electronic position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Daewoo Electronic vs. Woori Technology | Daewoo Electronic vs. Narae Nanotech Corp | Daewoo Electronic vs. KMH Hitech Co | Daewoo Electronic vs. PNC Technologies co |
| Xavis vs. Namhae Chemical | Xavis vs. Automobile Pc | Xavis vs. Choil Aluminum | Xavis vs. Hanwha Chemical Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |