Correlation Between Daou Technology and Kia Corp
Can any of the company-specific risk be diversified away by investing in both Daou Technology and Kia 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 Daou Technology and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Kia Corp, you can compare the effects of market volatilities on Daou Technology and Kia 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 Daou Technology with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Kia Corp.
Diversification Opportunities for Daou Technology and Kia Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daou and Kia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and Daou Technology 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 Daou Technology are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of Daou Technology i.e., Daou Technology and Kia Corp go up and down completely randomly.
Pair Corralation between Daou Technology and Kia Corp
Assuming the 90 days trading horizon Daou Technology is expected to generate 4.26 times less return on investment than Kia Corp. But when comparing it to its historical volatility, Daou Technology is 1.68 times less risky than Kia Corp. It trades about 0.02 of its potential returns per unit of risk. Kia Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,070,000 in Kia Corp on November 4, 2024 and sell it today you would earn a total of 130,000 from holding Kia Corp or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Kia Corp
Performance |
| Timeline |
| Daou Technology |
| Kia Corp |
Daou Technology and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Kia Corp
The main advantage of trading using opposite Daou Technology and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, Kia 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| Daou Technology vs. Daesung Hi Tech Co | Daou Technology vs. SV Investment | Daou Technology vs. Atinum Investment Co | Daou Technology vs. LG Display Co |
| Kia Corp vs. Daejung Chemicals Metals | Kia Corp vs. Heungkuk Metaltech CoLtd | Kia Corp vs. Formetal Co | Kia Corp vs. Sempio Foods 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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