Correlation Between Daekyung Machinery and Rorze Systems
Can any of the company-specific risk be diversified away by investing in both Daekyung Machinery and Rorze Systems 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 Daekyung Machinery and Rorze Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daekyung Machinery Engineering and Rorze Systems, you can compare the effects of market volatilities on Daekyung Machinery and Rorze Systems 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 Daekyung Machinery with a short position of Rorze Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daekyung Machinery and Rorze Systems.
Diversification Opportunities for Daekyung Machinery and Rorze Systems
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daekyung and Rorze is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Daekyung Machinery Engineering and Rorze Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rorze Systems and Daekyung Machinery 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 Daekyung Machinery Engineering are associated (or correlated) with Rorze Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rorze Systems has no effect on the direction of Daekyung Machinery i.e., Daekyung Machinery and Rorze Systems go up and down completely randomly.
Pair Corralation between Daekyung Machinery and Rorze Systems
Assuming the 90 days trading horizon Daekyung Machinery Engineering is expected to generate 0.96 times more return on investment than Rorze Systems. However, Daekyung Machinery Engineering is 1.04 times less risky than Rorze Systems. It trades about 0.04 of its potential returns per unit of risk. Rorze Systems is currently generating about -0.09 per unit of risk. If you would invest 50,900 in Daekyung Machinery Engineering on September 12, 2024 and sell it today you would earn a total of 600.00 from holding Daekyung Machinery Engineering or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 56.52% |
| Values | Daily Returns |
Daekyung Machinery Engineering vs. Rorze Systems
Performance |
| Timeline |
| Daekyung Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Rorze Systems |
Daekyung Machinery and Rorze Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daekyung Machinery and Rorze Systems
The main advantage of trading using opposite Daekyung Machinery and Rorze Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daekyung Machinery position performs unexpectedly, Rorze Systems 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 Rorze Systems will offset losses from the drop in Rorze Systems' long position.| Daekyung Machinery vs. Samsung Electronics Co | Daekyung Machinery vs. Samsung Electronics Co | Daekyung Machinery vs. SK Hynix | Daekyung Machinery vs. POSCO Holdings |
| Rorze Systems vs. Semyung Electric Machinery | Rorze Systems vs. Kakao Games Corp | Rorze Systems vs. Korean Reinsurance Co | Rorze Systems vs. Tuksu Engineering ConstructionLtd |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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