Correlation Between Digital Power and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Digital Power and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Digital Power and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Koryo Credit.
Diversification Opportunities for Digital Power and Koryo Credit
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and Koryo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Digital Power i.e., Digital Power and Koryo Credit go up and down completely randomly.
Pair Corralation between Digital Power and Koryo Credit
Assuming the 90 days trading horizon Digital Power is expected to generate 21.99 times less return on investment than Koryo Credit. In addition to that, Digital Power is 1.65 times more volatile than Koryo Credit Information. It trades about 0.01 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about 0.25 per unit of volatility. If you would invest 965,000 in Koryo Credit Information on August 31, 2024 and sell it today you would earn a total of 63,000 from holding Koryo Credit Information or generate 6.53% 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. Koryo Credit Information
Performance |
| Timeline |
| Digital Power Commun |
| Koryo Credit Information |
Digital Power and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Koryo Credit
The main advantage of trading using opposite Digital Power and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Digital Power vs. AptaBio Therapeutics | Digital Power vs. Daewoo SBI SPAC | Digital Power vs. Dream Security co | Digital Power vs. Microfriend |
| Koryo Credit vs. Korea New Network | Koryo Credit vs. ICD Co | Koryo Credit vs. DYPNF CoLtd | Koryo Credit vs. Busan Industrial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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