Correlation Between Daou Data and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Daou Data and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Daou Data and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Kyung Chang.
Diversification Opportunities for Daou Data and Kyung Chang
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daou and Kyung is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Daou Data i.e., Daou Data and Kyung Chang go up and down completely randomly.
Pair Corralation between Daou Data and Kyung Chang
If you would invest 1,039,000 in Daou Data Corp on September 15, 2024 and sell it today you would earn a total of 21,000 from holding Daou Data Corp or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Daou Data Corp vs. Kyung Chang Industrial
Performance |
| Timeline |
| Daou Data Corp |
| Kyung Chang Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Daou Data and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Kyung Chang
The main advantage of trading using opposite Daou Data and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's 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 |
| Kyung Chang vs. ITM Semiconductor Co | Kyung Chang vs. Daishin Information Communications | Kyung Chang vs. Hanmi Semiconductor Co | Kyung Chang vs. Daeduck Electronics 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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