Correlation Between Playgram and Daelim Industrial
Can any of the company-specific risk be diversified away by investing in both Playgram and Daelim Industrial 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 Playgram and Daelim Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and Daelim Industrial Co, you can compare the effects of market volatilities on Playgram and Daelim Industrial 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 Playgram with a short position of Daelim Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and Daelim Industrial.
Diversification Opportunities for Playgram and Daelim Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playgram and Daelim is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Playgram Co and Daelim Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Industrial and Playgram 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 Playgram Co are associated (or correlated) with Daelim Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Industrial has no effect on the direction of Playgram i.e., Playgram and Daelim Industrial go up and down completely randomly.
Pair Corralation between Playgram and Daelim Industrial
Assuming the 90 days trading horizon Playgram Co is expected to generate 2.68 times more return on investment than Daelim Industrial. However, Playgram is 2.68 times more volatile than Daelim Industrial Co. It trades about 0.0 of its potential returns per unit of risk. Daelim Industrial Co is currently generating about -0.01 per unit of risk. If you would invest 52,800 in Playgram Co on September 4, 2024 and sell it today you would lose (17,500) from holding Playgram Co or give up 33.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playgram Co vs. Daelim Industrial Co
Performance |
| Timeline |
| Playgram |
| Daelim Industrial |
Playgram and Daelim Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and Daelim Industrial
The main advantage of trading using opposite Playgram and Daelim Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram position performs unexpectedly, Daelim Industrial 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 Daelim Industrial will offset losses from the drop in Daelim Industrial's long position.| Playgram vs. LG Chemicals | Playgram vs. POSCO Holdings | Playgram vs. Hanwha Solutions | Playgram vs. Lotte Chemical Corp |
| Daelim Industrial vs. Samsung Electronics Co | Daelim Industrial vs. Samsung Electronics Co | Daelim Industrial vs. LG Energy Solution | Daelim Industrial vs. SK Hynix |
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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