Correlation Between Digital Power and Yura Tech
Can any of the company-specific risk be diversified away by investing in both Digital Power and Yura Tech 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 Yura Tech 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 Yura Tech Co, you can compare the effects of market volatilities on Digital Power and Yura Tech 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 Yura Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Yura Tech.
Diversification Opportunities for Digital Power and Yura Tech
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and Yura is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Yura Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yura Tech 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 Yura Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yura Tech has no effect on the direction of Digital Power i.e., Digital Power and Yura Tech go up and down completely randomly.
Pair Corralation between Digital Power and Yura Tech
Assuming the 90 days trading horizon Digital Power Communications is expected to under-perform the Yura Tech. But the stock apears to be less risky and, when comparing its historical volatility, Digital Power Communications is 1.37 times less risky than Yura Tech. The stock trades about -0.21 of its potential returns per unit of risk. The Yura Tech Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 797,000 in Yura Tech Co on November 7, 2024 and sell it today you would earn a total of 28,000 from holding Yura Tech Co or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Yura Tech Co
Performance |
| Timeline |
| Digital Power Commun |
| Yura Tech |
Digital Power and Yura Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Yura Tech
The main advantage of trading using opposite Digital Power and Yura Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Yura Tech 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 Yura Tech will offset losses from the drop in Yura Tech's long position.| Digital Power vs. Daeduck Electronics Co | Digital Power vs. Incar Financial Service | Digital Power vs. Seoul Electronics Telecom | Digital Power vs. Industrial Bank |
| Yura Tech vs. Alton Sports CoLtd | Yura Tech vs. Hotel Shilla Co | Yura Tech vs. Youngsin Metal Industrial | Yura Tech vs. Hankukpackage 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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