Correlation Between COWAY and PlayD
Can any of the company-specific risk be diversified away by investing in both COWAY and PlayD 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 COWAY and PlayD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COWAY Co and PlayD Co, you can compare the effects of market volatilities on COWAY and PlayD 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 COWAY with a short position of PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of COWAY and PlayD.
Diversification Opportunities for COWAY and PlayD
Very good diversification
The 3 months correlation between COWAY and PlayD is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding COWAY Co and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD and COWAY 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 COWAY Co are associated (or correlated) with PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of COWAY i.e., COWAY and PlayD go up and down completely randomly.
Pair Corralation between COWAY and PlayD
Assuming the 90 days trading horizon COWAY Co is expected to generate 0.56 times more return on investment than PlayD. However, COWAY Co is 1.8 times less risky than PlayD. It trades about 0.05 of its potential returns per unit of risk. PlayD Co is currently generating about -0.07 per unit of risk. If you would invest 6,590,000 in COWAY Co on August 29, 2024 and sell it today you would earn a total of 120,000 from holding COWAY Co or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COWAY Co vs. PlayD Co
Performance |
| Timeline |
| COWAY |
| PlayD |
COWAY and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COWAY and PlayD
The main advantage of trading using opposite COWAY and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COWAY position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| COWAY vs. Hankukpackage Co | COWAY vs. Shinhan Inverse Copper | COWAY vs. Haitai Confectionery Foods | COWAY vs. Duksan Hi Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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