Correlation Between Mobase Electronics and Daou Data
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and Daou Data 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 Mobase Electronics and Daou Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and Daou Data Corp, you can compare the effects of market volatilities on Mobase Electronics and Daou Data 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 Mobase Electronics with a short position of Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and Daou Data.
Diversification Opportunities for Mobase Electronics and Daou Data
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobase and Daou is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and Daou Data go up and down completely randomly.
Pair Corralation between Mobase Electronics and Daou Data
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to under-perform the Daou Data. In addition to that, Mobase Electronics is 1.22 times more volatile than Daou Data Corp. It trades about -0.29 of its total potential returns per unit of risk. Daou Data Corp is currently generating about -0.06 per unit of volatility. If you would invest 1,049,000 in Daou Data Corp on September 13, 2024 and sell it today you would lose (32,000) from holding Daou Data Corp or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobase Electronics CoLtd vs. Daou Data Corp
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| Daou Data Corp |
Mobase Electronics and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and Daou Data
The main advantage of trading using opposite Mobase Electronics and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Mobase Electronics vs. Daou Data Corp | Mobase Electronics vs. Solution Advanced Technology | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. Busan Ind |
| Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group | Daou Data vs. Hana Financial | Daou Data vs. Woori Financial Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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