Correlation Between Keyang Electric and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Keyang Electric and Daishin Balance 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 Keyang Electric and Daishin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Daishin Balance No8, you can compare the effects of market volatilities on Keyang Electric and Daishin Balance 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 Keyang Electric with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Daishin Balance.
Diversification Opportunities for Keyang Electric and Daishin Balance
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keyang and Daishin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 and Keyang Electric 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 Keyang Electric Machinery are associated (or correlated) with Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of Keyang Electric i.e., Keyang Electric and Daishin Balance go up and down completely randomly.
Pair Corralation between Keyang Electric and Daishin Balance
Assuming the 90 days trading horizon Keyang Electric is expected to generate 4.57 times less return on investment than Daishin Balance. But when comparing it to its historical volatility, Keyang Electric Machinery is 1.74 times less risky than Daishin Balance. It trades about 0.12 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 439,500 in Daishin Balance No8 on October 30, 2024 and sell it today you would earn a total of 109,500 from holding Daishin Balance No8 or generate 24.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Daishin Balance No8
Performance |
| Timeline |
| Keyang Electric Machinery |
| Daishin Balance No8 |
Keyang Electric and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Daishin Balance
The main advantage of trading using opposite Keyang Electric and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Keyang Electric vs. Iljin Display | Keyang Electric vs. Seohee Construction Co | Keyang Electric vs. Daesung Hi Tech Co | Keyang Electric vs. Sungdo Engineering Construction |
| Daishin Balance vs. Chorokbaem Healthcare Co | Daishin Balance vs. Echomarketing CoLtd | Daishin Balance vs. Dongnam Chemical Co | Daishin Balance vs. TK Chemical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |