Correlation Between Kyeryong Construction and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Daeduck Electronics 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 Kyeryong Construction and Daeduck Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and Daeduck Electronics Co, you can compare the effects of market volatilities on Kyeryong Construction and Daeduck Electronics 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 Kyeryong Construction with a short position of Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Daeduck Electronics.
Diversification Opportunities for Kyeryong Construction and Daeduck Electronics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kyeryong and Daeduck is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics and Kyeryong Construction 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 Kyeryong Construction Industrial are associated (or correlated) with Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Daeduck Electronics go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Daeduck Electronics
Assuming the 90 days trading horizon Kyeryong Construction is expected to generate 1.34 times less return on investment than Daeduck Electronics. In addition to that, Kyeryong Construction is 1.99 times more volatile than Daeduck Electronics Co. It trades about 0.03 of its total potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.07 per unit of volatility. If you would invest 663,000 in Daeduck Electronics Co on September 26, 2024 and sell it today you would earn a total of 9,000 from holding Daeduck Electronics Co or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Daeduck Electronics Co
Performance |
| Timeline |
| Kyeryong Construction |
| Daeduck Electronics |
Kyeryong Construction and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Daeduck Electronics
The main advantage of trading using opposite Kyeryong Construction and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Wonbang Tech Co | Kyeryong Construction vs. Busan Industrial Co | Kyeryong Construction vs. Busan Ind |
| Daeduck Electronics vs. AptaBio Therapeutics | Daeduck Electronics vs. Wonbang Tech Co | Daeduck Electronics vs. Busan Industrial Co | Daeduck Electronics vs. Busan Ind |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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