Correlation Between Mobase Electronics and Danal
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and Danal 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 Danal 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 Danal Co, you can compare the effects of market volatilities on Mobase Electronics and Danal 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 Danal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and Danal.
Diversification Opportunities for Mobase Electronics and Danal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobase and Danal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and Danal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danal 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 Danal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danal has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and Danal go up and down completely randomly.
Pair Corralation between Mobase Electronics and Danal
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to under-perform the Danal. But the stock apears to be less risky and, when comparing its historical volatility, Mobase Electronics CoLtd is 1.34 times less risky than Danal. The stock trades about -0.48 of its potential returns per unit of risk. The Danal Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 309,500 in Danal Co on September 4, 2024 and sell it today you would lose (4,500) from holding Danal Co or give up 1.45% 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. Danal Co
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| Danal |
Mobase Electronics and Danal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and Danal
The main advantage of trading using opposite Mobase Electronics and Danal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, Danal 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 Danal will offset losses from the drop in Danal's long position.| Mobase Electronics vs. Korea Real Estate | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. UNISEM Co | Mobase Electronics vs. RPBio Inc |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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