Correlation Between Daou Technology and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Daou Technology and Daishin Information 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 Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Daishin Information Communications, you can compare the effects of market volatilities on Daou Technology and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Daishin Information.
Diversification Opportunities for Daou Technology and Daishin Information
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daou and Daishin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Daou Technology i.e., Daou Technology and Daishin Information go up and down completely randomly.
Pair Corralation between Daou Technology and Daishin Information
Assuming the 90 days trading horizon Daou Technology is expected to generate 1.05 times more return on investment than Daishin Information. However, Daou Technology is 1.05 times more volatile than Daishin Information Communications. It trades about 0.01 of its potential returns per unit of risk. Daishin Information Communications is currently generating about -0.04 per unit of risk. If you would invest 1,798,816 in Daou Technology on September 1, 2024 and sell it today you would earn a total of 28,184 from holding Daou Technology or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Daishin Information Communicat
Performance |
| Timeline |
| Daou Technology |
| Daishin Information |
Daou Technology and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Daishin Information
The main advantage of trading using opposite Daou Technology and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Daou Technology vs. Kaonmedia Co | Daou Technology vs. JYP Entertainment Corp | Daou Technology vs. DC Media Co | Daou Technology vs. Raontech |
| Daishin Information vs. Settlebank | Daishin Information vs. Busan Industrial Co | Daishin Information vs. Busan Ind | Daishin Information vs. Mirae Asset Daewoo |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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