Correlation Between Daol Investment and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Daol Investment and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on Daol Investment and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and NewFlex Technology.
Diversification Opportunities for Daol Investment and NewFlex Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daol and NewFlex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Daol Investment i.e., Daol Investment and NewFlex Technology go up and down completely randomly.
Pair Corralation between Daol Investment and NewFlex Technology
Assuming the 90 days trading horizon Daol Investment Securities is expected to generate 0.44 times more return on investment than NewFlex Technology. However, Daol Investment Securities is 2.26 times less risky than NewFlex Technology. It trades about -0.21 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.1 per unit of risk. If you would invest 314,500 in Daol Investment Securities on November 3, 2024 and sell it today you would lose (22,500) from holding Daol Investment Securities or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daol Investment Securities vs. NewFlex Technology Co
Performance |
| Timeline |
| Daol Investment Secu |
| NewFlex Technology |
Daol Investment and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and NewFlex Technology
The main advantage of trading using opposite Daol Investment and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Daol Investment vs. Sempio Foods Co | Daol Investment vs. CKH Food Health | Daol Investment vs. Seoul Food Industrial | Daol Investment vs. Daewoo Electronic Components |
| NewFlex Technology vs. Nice Information Telecommunication | NewFlex Technology vs. MEDIANA CoLtd | NewFlex Technology vs. Next Entertainment World | NewFlex Technology vs. Daewon Media 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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