Correlation Between Daishin Information and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Daishin Information and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Kyung Chang.
Diversification Opportunities for Daishin Information and Kyung Chang
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daishin and Kyung is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Daishin Information i.e., Daishin Information and Kyung Chang go up and down completely randomly.
Pair Corralation between Daishin Information and Kyung Chang
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 1.3 times more return on investment than Kyung Chang. However, Daishin Information is 1.3 times more volatile than Kyung Chang Industrial. It trades about 0.42 of its potential returns per unit of risk. Kyung Chang Industrial is currently generating about 0.12 per unit of risk. If you would invest 81,000 in Daishin Information Communications on September 15, 2024 and sell it today you would earn a total of 24,500 from holding Daishin Information Communications or generate 30.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daishin Information Communicat vs. Kyung Chang Industrial
Performance |
| Timeline |
| Daishin Information |
| Kyung Chang Industrial |
Daishin Information and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Kyung Chang
The main advantage of trading using opposite Daishin Information and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| Daishin Information vs. Settlebank | Daishin Information vs. Solution Advanced Technology | Daishin Information vs. Busan Industrial Co | Daishin Information vs. Busan Ind |
| Kyung Chang vs. ITM Semiconductor Co | Kyung Chang vs. Daishin Information Communications | Kyung Chang vs. Hanmi Semiconductor Co | Kyung Chang vs. Daeduck Electronics 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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