Correlation Between Daishin Information and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Songwon Industrial 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 Daishin Information and Songwon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Songwon Industrial Co, you can compare the effects of market volatilities on Daishin Information and Songwon Industrial 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 Daishin Information with a short position of Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Songwon Industrial.
Diversification Opportunities for Daishin Information and Songwon Industrial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daishin and Songwon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial and Daishin Information 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 Daishin Information Communications are associated (or correlated) with Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of Daishin Information i.e., Daishin Information and Songwon Industrial go up and down completely randomly.
Pair Corralation between Daishin Information and Songwon Industrial
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 0.93 times more return on investment than Songwon Industrial. However, Daishin Information Communications is 1.08 times less risky than Songwon Industrial. It trades about 0.0 of its potential returns per unit of risk. Songwon Industrial Co is currently generating about -0.03 per unit of risk. If you would invest 112,809 in Daishin Information Communications on November 8, 2024 and sell it today you would lose (8,409) from holding Daishin Information Communications or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Songwon Industrial Co
Performance |
| Timeline |
| Daishin Information |
| Songwon Industrial |
Daishin Information and Songwon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Songwon Industrial
The main advantage of trading using opposite Daishin Information and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.| Daishin Information vs. Dong A Steel Technology | Daishin Information vs. INSUN Environmental New | Daishin Information vs. Finebesteel | Daishin Information vs. Insun Environment New |
| Songwon Industrial vs. Korea Industrial Co | Songwon Industrial vs. Narae Nanotech Corp | Songwon Industrial vs. Kbi Metal Co | Songwon Industrial vs. Hyundai Industrial Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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