Correlation Between Daol Investment and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Daol Investment and Stic Investments 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 Stic Investments 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 Stic Investments, you can compare the effects of market volatilities on Daol Investment and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and Stic Investments.
Diversification Opportunities for Daol Investment and Stic Investments
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daol and Stic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Daol Investment i.e., Daol Investment and Stic Investments go up and down completely randomly.
Pair Corralation between Daol Investment and Stic Investments
Assuming the 90 days trading horizon Daol Investment Securities is expected to under-perform the Stic Investments. In addition to that, Daol Investment is 1.44 times more volatile than Stic Investments. It trades about -0.17 of its total potential returns per unit of risk. Stic Investments is currently generating about -0.19 per unit of volatility. If you would invest 873,000 in Stic Investments on November 7, 2024 and sell it today you would lose (36,000) from holding Stic Investments or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daol Investment Securities vs. Stic Investments
Performance |
| Timeline |
| Daol Investment Secu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Stic Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Daol Investment and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and Stic Investments
The main advantage of trading using opposite Daol Investment and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Daol Investment vs. Ewon Comfortech Co | Daol Investment vs. V One Tech Co | Daol Investment vs. Yura Tech Co | Daol Investment vs. Ssangyong Materials Corp |
| Stic Investments vs. Genie Music | Stic Investments vs. Global Standard Technology | Stic Investments vs. Digital Imaging Technology | Stic Investments vs. SK IE Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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