Correlation Between Daol Investment and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Daol Investment and Sangsangin Investment 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 Daol Investment and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daol Investment Securities and Sangsangin Investment Securities, you can compare the effects of market volatilities on Daol Investment and Sangsangin Investment 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 Daol Investment with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and Sangsangin Investment.
Diversification Opportunities for Daol Investment and Sangsangin Investment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daol and Sangsangin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Daol Investment 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 Daol Investment Securities are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Daol Investment i.e., Daol Investment and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Daol Investment and Sangsangin Investment
Assuming the 90 days trading horizon Daol Investment Securities is expected to generate 2.18 times more return on investment than Sangsangin Investment. However, Daol Investment is 2.18 times more volatile than Sangsangin Investment Securities. It trades about 0.04 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.1 per unit of risk. If you would invest 283,000 in Daol Investment Securities on October 26, 2024 and sell it today you would earn a total of 13,000 from holding Daol Investment Securities or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daol Investment Securities vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Daol Investment Secu |
| Sangsangin Investment |
Daol Investment and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and Sangsangin Investment
The main advantage of trading using opposite Daol Investment and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Daol Investment vs. Samsung Electronics Co | Daol Investment vs. Samsung Electronics Co | Daol Investment vs. LG Energy Solution | Daol Investment vs. SK Hynix |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. SK Hynix | Sangsangin Investment vs. HMM 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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