Correlation Between Daou Data and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both Daou Data and Daejoo Electronic 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 Daejoo Electronic 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 Daejoo Electronic Materials, you can compare the effects of market volatilities on Daou Data and Daejoo Electronic 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 Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Daejoo Electronic.
Diversification Opportunities for Daou Data and Daejoo Electronic
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Daejoo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic 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 Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of Daou Data i.e., Daou Data and Daejoo Electronic go up and down completely randomly.
Pair Corralation between Daou Data and Daejoo Electronic
Assuming the 90 days trading horizon Daou Data Corp is expected to generate 0.31 times more return on investment than Daejoo Electronic. However, Daou Data Corp is 3.27 times less risky than Daejoo Electronic. It trades about -0.08 of its potential returns per unit of risk. Daejoo Electronic Materials is currently generating about -0.3 per unit of risk. If you would invest 1,103,000 in Daou Data Corp on August 31, 2024 and sell it today you would lose (22,000) from holding Daou Data Corp or give up 1.99% 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. Daejoo Electronic Materials
Performance |
| Timeline |
| Daou Data Corp |
| Daejoo Electronic |
Daou Data and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Daejoo Electronic
The main advantage of trading using opposite Daou Data and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Daejoo Electronic 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic's long position.| Daou Data vs. Samsung Electronics Co | Daou Data vs. Samsung Electronics Co | Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group |
| Daejoo Electronic vs. Dongsin Engineering Construction | Daejoo Electronic vs. Doosan Fuel Cell | Daejoo Electronic vs. Daishin Balance 1 | Daejoo Electronic vs. Total Soft Bank |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Directory Find actively traded commodities issued by global exchanges |