Correlation Between Daesung Private and Posco ICT
Can any of the company-specific risk be diversified away by investing in both Daesung Private and Posco ICT 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 Daesung Private and Posco ICT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Private Equity and Posco ICT, you can compare the effects of market volatilities on Daesung Private and Posco ICT 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 Daesung Private with a short position of Posco ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Private and Posco ICT.
Diversification Opportunities for Daesung Private and Posco ICT
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daesung and Posco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Private Equity and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT and Daesung Private 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 Daesung Private Equity are associated (or correlated) with Posco ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco ICT has no effect on the direction of Daesung Private i.e., Daesung Private and Posco ICT go up and down completely randomly.
Pair Corralation between Daesung Private and Posco ICT
Assuming the 90 days trading horizon Daesung Private Equity is expected to generate 1.2 times more return on investment than Posco ICT. However, Daesung Private is 1.2 times more volatile than Posco ICT. It trades about 0.11 of its potential returns per unit of risk. Posco ICT is currently generating about 0.04 per unit of risk. If you would invest 186,600 in Daesung Private Equity on October 23, 2024 and sell it today you would earn a total of 8,400 from holding Daesung Private Equity or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Private Equity vs. Posco ICT
Performance |
| Timeline |
| Daesung Private Equity |
| Posco ICT |
Daesung Private and Posco ICT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Private and Posco ICT
The main advantage of trading using opposite Daesung Private and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Private position performs unexpectedly, Posco ICT 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 Posco ICT will offset losses from the drop in Posco ICT's long position.| Daesung Private vs. Hanjoo Light Metal | Daesung Private vs. Heungkuk Metaltech CoLtd | Daesung Private vs. Nh Investment And | Daesung Private vs. Korea Investment Holdings |
| Posco ICT vs. Daishin Balance No8 | Posco ICT vs. NAU IB Capital | Posco ICT vs. Daishin Balance No | Posco ICT vs. Daesung Private Equity |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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