Correlation Between Korean Drug and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Daishin Information 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 Korean Drug and Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Drug Co and Daishin Information Communications, you can compare the effects of market volatilities on Korean Drug and Daishin Information 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 Korean Drug with a short position of Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Daishin Information.
Diversification Opportunities for Korean Drug and Daishin Information
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korean and Daishin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information and Korean Drug 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 Korean Drug Co are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Korean Drug i.e., Korean Drug and Daishin Information go up and down completely randomly.
Pair Corralation between Korean Drug and Daishin Information
Assuming the 90 days trading horizon Korean Drug Co is expected to under-perform the Daishin Information. In addition to that, Korean Drug is 1.13 times more volatile than Daishin Information Communications. It trades about -0.17 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about -0.03 per unit of volatility. If you would invest 88,300 in Daishin Information Communications on August 29, 2024 and sell it today you would lose (2,400) from holding Daishin Information Communications or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Korean Drug Co vs. Daishin Information Communicat
Performance |
| Timeline |
| Korean Drug |
| Daishin Information |
Korean Drug and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Daishin Information
The main advantage of trading using opposite Korean Drug and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Daishin Information 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 Information will offset losses from the drop in Daishin Information's long position.| Korean Drug vs. AnterogenCoLtd | Korean Drug vs. Busan Industrial Co | Korean Drug vs. Busan Ind | Korean Drug vs. Shinhan WTI Futures |
| Daishin Information vs. Settlebank | Daishin Information vs. Cafe24 Corp | Daishin Information vs. Korea Computer Systems | Daishin Information vs. SSR Inc |
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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