Correlation Between Daou Technology and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Daou Technology and NewFlex Technology 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 NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and NewFlex Technology Co, you can compare the effects of market volatilities on Daou Technology and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and NewFlex Technology.
Diversification Opportunities for Daou Technology and NewFlex Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and NewFlex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Daou Technology i.e., Daou Technology and NewFlex Technology go up and down completely randomly.
Pair Corralation between Daou Technology and NewFlex Technology
Assuming the 90 days trading horizon Daou Technology is expected to generate 0.32 times more return on investment than NewFlex Technology. However, Daou Technology is 3.1 times less risky than NewFlex Technology. It trades about -0.03 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.21 per unit of risk. If you would invest 1,837,000 in Daou Technology on September 1, 2024 and sell it today you would lose (10,000) from holding Daou Technology or give up 0.54% 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. NewFlex Technology Co
Performance |
| Timeline |
| Daou Technology |
| NewFlex Technology |
Daou Technology and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and NewFlex Technology
The main advantage of trading using opposite Daou Technology and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Daou Technology vs. Kaonmedia Co | Daou Technology vs. JYP Entertainment Corp | Daou Technology vs. DC Media Co | Daou Technology vs. Raontech |
| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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