Correlation Between Daou Data and Atec
Can any of the company-specific risk be diversified away by investing in both Daou Data and Atec 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 Atec 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 Atec Co, you can compare the effects of market volatilities on Daou Data and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Atec.
Diversification Opportunities for Daou Data and Atec
Average diversification
The 3 months correlation between Daou and Atec is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Daou Data i.e., Daou Data and Atec go up and down completely randomly.
Pair Corralation between Daou Data and Atec
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Atec. But the stock apears to be less risky and, when comparing its historical volatility, Daou Data Corp is 5.69 times less risky than Atec. The stock trades about -0.13 of its potential returns per unit of risk. The Atec Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,479,000 in Atec Co on August 30, 2024 and sell it today you would lose (91,000) from holding Atec Co or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Atec Co
Performance |
| Timeline |
| Daou Data Corp |
| Atec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Daou Data and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Atec
The main advantage of trading using opposite Daou Data and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Daou Data vs. Cube Entertainment | Daou Data vs. Dreamus Company | Daou Data vs. LG Energy Solution | Daou Data vs. Dongwon System |
| Atec vs. FOODWELL Co | Atec vs. Korea Petro Chemical | Atec vs. Samlip General Foods | Atec vs. Kukdo Chemical 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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