Correlation Between Daishin Information and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Daewon Media 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 Daewon Media 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 Daewon Media Co, you can compare the effects of market volatilities on Daishin Information and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Daewon Media.
Diversification Opportunities for Daishin Information and Daewon Media
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daishin and Daewon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Daishin Information i.e., Daishin Information and Daewon Media go up and down completely randomly.
Pair Corralation between Daishin Information and Daewon Media
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 0.89 times more return on investment than Daewon Media. However, Daishin Information Communications is 1.12 times less risky than Daewon Media. It trades about -0.01 of its potential returns per unit of risk. Daewon Media Co is currently generating about -0.04 per unit of risk. If you would invest 126,898 in Daishin Information Communications on September 19, 2024 and sell it today you would lose (20,798) from holding Daishin Information Communications or give up 16.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Daewon Media Co
Performance |
| Timeline |
| Daishin Information |
| Daewon Media |
Daishin Information and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Daewon Media
The main advantage of trading using opposite Daishin Information and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Daishin Information vs. Sung Bo Chemicals | Daishin Information vs. Samhyun Steel Co | Daishin Information vs. Finebesteel | Daishin Information vs. Moonbae Steel |
| Daewon Media vs. Eugene Investment Securities | Daewon Media vs. DSC Investment | Daewon Media vs. Shinsegae Information Communication | Daewon Media vs. Daishin Information Communications |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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