Correlation Between Daol Investment and CG Hi
Can any of the company-specific risk be diversified away by investing in both Daol Investment and CG Hi 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 CG Hi 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 CG Hi Tech, you can compare the effects of market volatilities on Daol Investment and CG Hi 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 CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and CG Hi.
Diversification Opportunities for Daol Investment and CG Hi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daol and 264660 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech 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 CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of Daol Investment i.e., Daol Investment and CG Hi go up and down completely randomly.
Pair Corralation between Daol Investment and CG Hi
Assuming the 90 days trading horizon Daol Investment Securities is expected to generate 0.63 times more return on investment than CG Hi. However, Daol Investment Securities is 1.6 times less risky than CG Hi. It trades about 0.09 of its potential returns per unit of risk. CG Hi Tech is currently generating about -0.2 per unit of risk. If you would invest 252,000 in Daol Investment Securities on September 14, 2024 and sell it today you would earn a total of 8,500 from holding Daol Investment Securities or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daol Investment Securities vs. CG Hi Tech
Performance |
| Timeline |
| Daol Investment Secu |
| CG Hi Tech |
Daol Investment and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daol Investment and CG Hi
The main advantage of trading using opposite Daol Investment and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi'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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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