Correlation Between Automobile and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Automobile 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 Automobile and Daishin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Daishin Balance No8, you can compare the effects of market volatilities on Automobile 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 Automobile with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Daishin Balance.
Diversification Opportunities for Automobile and Daishin Balance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Automobile and Daishin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc 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 Automobile 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 Automobile Pc 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 Automobile i.e., Automobile and Daishin Balance go up and down completely randomly.
Pair Corralation between Automobile and Daishin Balance
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Daishin Balance. But the stock apears to be less risky and, when comparing its historical volatility, Automobile Pc is 1.11 times less risky than Daishin Balance. The stock trades about -0.07 of its potential returns per unit of risk. The Daishin Balance No8 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 790,000 in Daishin Balance No8 on September 19, 2024 and sell it today you would lose (325,000) from holding Daishin Balance No8 or give up 41.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Daishin Balance No8
Performance |
| Timeline |
| Automobile Pc |
| Daishin Balance No8 |
Automobile and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Daishin Balance
The main advantage of trading using opposite Automobile and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile 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.| Automobile vs. Hyundai Engineering Plastics | Automobile vs. Union Materials Corp | Automobile vs. Hana Materials | Automobile vs. PI Advanced Materials |
| Daishin Balance vs. TS Investment Corp | Daishin Balance vs. Automobile Pc | Daishin Balance vs. Lotte Data Communication | Daishin Balance vs. KTB Investment Securities |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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