Correlation Between Daishin Information and Oriental Precision
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Oriental Precision 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 Oriental Precision 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 Oriental Precision Engineering, you can compare the effects of market volatilities on Daishin Information and Oriental Precision 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 Oriental Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Oriental Precision.
Diversification Opportunities for Daishin Information and Oriental Precision
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daishin and Oriental is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Oriental Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Precision 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 Oriental Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Precision has no effect on the direction of Daishin Information i.e., Daishin Information and Oriental Precision go up and down completely randomly.
Pair Corralation between Daishin Information and Oriental Precision
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 0.8 times more return on investment than Oriental Precision. However, Daishin Information Communications is 1.25 times less risky than Oriental Precision. It trades about 0.01 of its potential returns per unit of risk. Oriental Precision Engineering is currently generating about -0.01 per unit of risk. If you would invest 104,600 in Daishin Information Communications on November 8, 2024 and sell it today you would lose (200.00) from holding Daishin Information Communications or give up 0.19% 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. Oriental Precision Engineering
Performance |
| Timeline |
| Daishin Information |
| Oriental Precision |
Daishin Information and Oriental Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Oriental Precision
The main advantage of trading using opposite Daishin Information and Oriental Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Oriental Precision 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 Oriental Precision will offset losses from the drop in Oriental Precision'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 |
| Oriental Precision vs. Samsung Card Co | Oriental Precision vs. EBEST Investment Securities | Oriental Precision vs. Koh Young Technology | Oriental Precision vs. Hansol Chemica |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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