Correlation Between Daou Data and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Daou Data and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Daou Data and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Jeju Semiconductor.
Diversification Opportunities for Daou Data and Jeju Semiconductor
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daou and Jeju is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Daou Data i.e., Daou Data and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Daou Data and Jeju Semiconductor
Assuming the 90 days trading horizon Daou Data Corp is expected to generate 0.43 times more return on investment than Jeju Semiconductor. However, Daou Data Corp is 2.32 times less risky than Jeju Semiconductor. It trades about -0.13 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about -0.3 per unit of risk. If you would invest 1,172,000 in Daou Data Corp on August 29, 2024 and sell it today you would lose (72,000) from holding Daou Data Corp or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| Daou Data Corp |
| Jeju Semiconductor Corp |
Daou Data and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Jeju Semiconductor
The main advantage of trading using opposite Daou Data and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Daou Data vs. Cube Entertainment | Daou Data vs. Dreamus Company | Daou Data vs. LG Energy Solution | Daou Data vs. Dongwon System |
| Jeju Semiconductor vs. Daou Data Corp | Jeju Semiconductor vs. Busan Industrial Co | Jeju Semiconductor vs. Busan Ind | Jeju Semiconductor vs. Shinhan WTI Futures |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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