Correlation Between Daishin Information and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Daishin Information and KakaoBank 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 KakaoBank 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 KakaoBank Corp, you can compare the effects of market volatilities on Daishin Information and KakaoBank 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and KakaoBank Corp.
Diversification Opportunities for Daishin Information and KakaoBank Corp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daishin and KakaoBank is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Daishin Information i.e., Daishin Information and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Daishin Information and KakaoBank Corp
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 1.38 times more return on investment than KakaoBank Corp. However, Daishin Information is 1.38 times more volatile than KakaoBank Corp. It trades about 0.03 of its potential returns per unit of risk. KakaoBank Corp is currently generating about 0.02 per unit of risk. If you would invest 99,900 in Daishin Information Communications on October 21, 2024 and sell it today you would earn a total of 6,100 from holding Daishin Information Communications or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. KakaoBank Corp
Performance |
| Timeline |
| Daishin Information |
| KakaoBank Corp |
Daishin Information and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and KakaoBank Corp
The main advantage of trading using opposite Daishin Information and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, KakaoBank 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Daishin Information vs. Shinil Electronics Co | Daishin Information vs. Daewoo Electronic Components | Daishin Information vs. Insung Information Co | Daishin Information vs. Daejoo Electronic Materials |
| KakaoBank Corp vs. NH Investment Securities | KakaoBank Corp vs. LG Household Healthcare | KakaoBank Corp vs. Samyung Trading Co | KakaoBank Corp vs. DSC Investment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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