Correlation Between Daishin Information and Cafe24 Corp
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Cafe24 Corp 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 Cafe24 Corp 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 Cafe24 Corp, you can compare the effects of market volatilities on Daishin Information and Cafe24 Corp 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 Cafe24 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Cafe24 Corp.
Diversification Opportunities for Daishin Information and Cafe24 Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daishin and Cafe24 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Cafe24 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cafe24 Corp 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 Cafe24 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cafe24 Corp has no effect on the direction of Daishin Information i.e., Daishin Information and Cafe24 Corp go up and down completely randomly.
Pair Corralation between Daishin Information and Cafe24 Corp
Assuming the 90 days trading horizon Daishin Information is expected to generate 1.84 times less return on investment than Cafe24 Corp. But when comparing it to its historical volatility, Daishin Information Communications is 2.66 times less risky than Cafe24 Corp. It trades about 0.46 of its potential returns per unit of risk. Cafe24 Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,120,000 in Cafe24 Corp on November 27, 2024 and sell it today you would earn a total of 1,300,000 from holding Cafe24 Corp or generate 31.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Cafe24 Corp
Performance |
| Timeline |
| Daishin Information |
| Cafe24 Corp |
Daishin Information and Cafe24 Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Cafe24 Corp
The main advantage of trading using opposite Daishin Information and Cafe24 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Cafe24 Corp 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 Cafe24 Corp will offset losses from the drop in Cafe24 Corp's long position.| Daishin Information vs. Sangshin Electronics Co | Daishin Information vs. Vissem Electronics Co | Daishin Information vs. Jahwa Electronics Co | Daishin Information vs. JYP Entertainment Corp |
| Cafe24 Corp vs. FNC Entertainment Co | Cafe24 Corp vs. Coloray International Investment | Cafe24 Corp vs. YG Entertainment | Cafe24 Corp vs. EBEST 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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