Correlation Between Daou Technology and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Daou Technology and Samhwa Paint 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 Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Samhwa Paint Industrial, you can compare the effects of market volatilities on Daou Technology and Samhwa Paint 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 Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Samhwa Paint.
Diversification Opportunities for Daou Technology and Samhwa Paint
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Samhwa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial 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 Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Daou Technology i.e., Daou Technology and Samhwa Paint go up and down completely randomly.
Pair Corralation between Daou Technology and Samhwa Paint
Assuming the 90 days trading horizon Daou Technology is expected to generate 0.56 times more return on investment than Samhwa Paint. However, Daou Technology is 1.79 times less risky than Samhwa Paint. It trades about -0.02 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.11 per unit of risk. If you would invest 1,825,000 in Daou Technology on October 27, 2024 and sell it today you would lose (36,000) from holding Daou Technology or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Daou Technology |
| Samhwa Paint Industrial |
Daou Technology and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Samhwa Paint
The main advantage of trading using opposite Daou Technology and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Daou Technology vs. iNtRON Biotechnology | Daou Technology vs. SBI Investment KOREA | Daou Technology vs. Stic Investments | Daou Technology vs. Ilji Technology Co |
| Samhwa Paint vs. Aprogen Healthcare Games | Samhwa Paint vs. Samyung Trading Co | Samhwa Paint vs. Woori Technology Investment | Samhwa Paint vs. Innowireless 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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