Correlation Between Daou Data and Mobase Electronics
Can any of the company-specific risk be diversified away by investing in both Daou Data and Mobase Electronics 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 Daou Data and Mobase Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Data Corp and Mobase Electronics CoLtd, you can compare the effects of market volatilities on Daou Data and Mobase Electronics 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 Daou Data with a short position of Mobase Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Mobase Electronics.
Diversification Opportunities for Daou Data and Mobase Electronics
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Mobase is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Mobase Electronics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobase Electronics CoLtd and Daou Data 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 Daou Data Corp are associated (or correlated) with Mobase Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobase Electronics CoLtd has no effect on the direction of Daou Data i.e., Daou Data and Mobase Electronics go up and down completely randomly.
Pair Corralation between Daou Data and Mobase Electronics
Assuming the 90 days trading horizon Daou Data Corp is expected to generate 0.89 times more return on investment than Mobase Electronics. However, Daou Data Corp is 1.13 times less risky than Mobase Electronics. It trades about -0.05 of its potential returns per unit of risk. Mobase Electronics CoLtd is currently generating about -0.07 per unit of risk. If you would invest 1,315,978 in Daou Data Corp on September 12, 2024 and sell it today you would lose (298,978) from holding Daou Data Corp or give up 22.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Mobase Electronics CoLtd
Performance |
| Timeline |
| Daou Data Corp |
| Mobase Electronics CoLtd |
Daou Data and Mobase Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Mobase Electronics
The main advantage of trading using opposite Daou Data and Mobase Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Mobase Electronics 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 Mobase Electronics will offset losses from the drop in Mobase Electronics' long position.| Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group | Daou Data vs. Hana Financial | Daou Data vs. Woori Financial Group |
| Mobase Electronics vs. Daou Data Corp | Mobase Electronics vs. Solution Advanced Technology | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. Busan Ind |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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