Correlation Between Daou Data and UNISEM
Can any of the company-specific risk be diversified away by investing in both Daou Data and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on Daou Data and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and UNISEM.
Diversification Opportunities for Daou Data and UNISEM
Poor diversification
The 3 months correlation between Daou and UNISEM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Daou Data i.e., Daou Data and UNISEM go up and down completely randomly.
Pair Corralation between Daou Data and UNISEM
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the UNISEM. But the stock apears to be less risky and, when comparing its historical volatility, Daou Data Corp is 1.07 times less risky than UNISEM. The stock trades about -0.04 of its potential returns per unit of risk. The UNISEM Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 631,367 in UNISEM Co on August 28, 2024 and sell it today you would lose (25,367) from holding UNISEM Co or give up 4.02% 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. UNISEM Co
Performance |
| Timeline |
| Daou Data Corp |
| UNISEM |
Daou Data and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and UNISEM
The main advantage of trading using opposite Daou Data and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Daou Data vs. Korea New Network | Daou Data vs. Dong A Eltek | Daou Data vs. Dreamus Company | Daou Data vs. SK Bioscience Co |
| UNISEM vs. Korea Real Estate | UNISEM vs. Korea Ratings Co | UNISEM vs. IQuest Co | UNISEM vs. Wonbang Tech 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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