Correlation Between Digital Power and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Digital Power and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Digital Power and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Jeju Beer.
Diversification Opportunities for Digital Power and Jeju Beer
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and Jeju is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Digital Power i.e., Digital Power and Jeju Beer go up and down completely randomly.
Pair Corralation between Digital Power and Jeju Beer
Assuming the 90 days trading horizon Digital Power Communications is expected to generate 0.61 times more return on investment than Jeju Beer. However, Digital Power Communications is 1.63 times less risky than Jeju Beer. It trades about -0.16 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.34 per unit of risk. If you would invest 870,000 in Digital Power Communications on November 3, 2024 and sell it today you would lose (33,000) from holding Digital Power Communications or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Jeju Beer Co
Performance |
| Timeline |
| Digital Power Commun |
| Jeju Beer |
Digital Power and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Jeju Beer
The main advantage of trading using opposite Digital Power and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Digital Power vs. KT Submarine Telecom | Digital Power vs. Aprogen Healthcare Games | Digital Power vs. InnoTherapy | Digital Power vs. Seoul Electronics Telecom |
| Jeju Beer vs. Koryo Credit Information | Jeju Beer vs. Pureun Mutual Savings | Jeju Beer vs. Lotte Non Life Insurance | Jeju Beer vs. Jeju 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |