Correlation Between Digital Power and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Digital Power and Myoung Shin 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 Digital Power and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Myoung Shin Industrial, you can compare the effects of market volatilities on Digital Power and Myoung Shin 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 Digital Power with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Myoung Shin.
Diversification Opportunities for Digital Power and Myoung Shin
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and Myoung is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Digital Power 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 Digital Power Communications are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Digital Power i.e., Digital Power and Myoung Shin go up and down completely randomly.
Pair Corralation between Digital Power and Myoung Shin
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.95 times more return on investment than Myoung Shin. However, Digital Power Communications is 1.05 times less risky than Myoung Shin. It trades about 0.04 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.06 per unit of risk. If you would invest 669,592 in Digital Power Communications on August 29, 2024 and sell it today you would earn a total of 130,408 from holding Digital Power Communications or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Myoung Shin Industrial
Performance |
| Timeline |
| Digital Power Commun |
| Myoung Shin Industrial |
Digital Power and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Myoung Shin
The main advantage of trading using opposite Digital Power and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Digital Power vs. National Plastic Co | Digital Power vs. LS Materials | Digital Power vs. Automobile Pc | Digital Power vs. Alton Sports CoLtd |
| Myoung Shin vs. Sungwoo Electronics Co | Myoung Shin vs. Samwha Electronics Co | Myoung Shin vs. Namhwa Industrial Co | Myoung Shin vs. Kbi Metal 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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