Correlation Between Digital Power and YeSUN Tech
Can any of the company-specific risk be diversified away by investing in both Digital Power and YeSUN 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 YeSUN 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 YeSUN Tech CoLtd, you can compare the effects of market volatilities on Digital Power and YeSUN 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 YeSUN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and YeSUN Tech.
Diversification Opportunities for Digital Power and YeSUN Tech
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Digital and YeSUN is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and YeSUN Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeSUN Tech CoLtd 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 YeSUN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeSUN Tech CoLtd has no effect on the direction of Digital Power i.e., Digital Power and YeSUN Tech go up and down completely randomly.
Pair Corralation between Digital Power and YeSUN Tech
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.72 times more return on investment than YeSUN Tech. However, Digital Power Communications is 1.38 times less risky than YeSUN Tech. It trades about 0.06 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about -0.06 per unit of risk. If you would invest 520,582 in Digital Power Communications on September 12, 2024 and sell it today you would earn a total of 331,418 from holding Digital Power Communications or generate 63.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. YeSUN Tech CoLtd
Performance |
| Timeline |
| Digital Power Commun |
| YeSUN Tech CoLtd |
Digital Power and YeSUN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and YeSUN Tech
The main advantage of trading using opposite Digital Power and YeSUN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, YeSUN 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 YeSUN Tech will offset losses from the drop in YeSUN Tech's long position.| Digital Power vs. Dongwon Metal Co | Digital Power vs. Samsung Publishing Co | Digital Power vs. Miwon Chemicals Co | Digital Power vs. PJ Metal Co |
| YeSUN Tech vs. Youngsin Metal Industrial | YeSUN Tech vs. Digital Power Communications | YeSUN Tech vs. Kukil Metal Co | YeSUN Tech vs. Inzi Display CoLtd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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