Correlation Between Daou Data and Sungwoo Electronics
Can any of the company-specific risk be diversified away by investing in both Daou Data and Sungwoo Electronics 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 Sungwoo Electronics 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 Sungwoo Electronics Co, you can compare the effects of market volatilities on Daou Data and Sungwoo Electronics 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 Sungwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Sungwoo Electronics.
Diversification Opportunities for Daou Data and Sungwoo Electronics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Sungwoo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Sungwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Electronics 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 Sungwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Electronics has no effect on the direction of Daou Data i.e., Daou Data and Sungwoo Electronics go up and down completely randomly.
Pair Corralation between Daou Data and Sungwoo Electronics
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Sungwoo Electronics. In addition to that, Daou Data is 1.21 times more volatile than Sungwoo Electronics Co. It trades about -0.04 of its total potential returns per unit of risk. Sungwoo Electronics Co is currently generating about 0.04 per unit of volatility. If you would invest 269,360 in Sungwoo Electronics Co on September 2, 2024 and sell it today you would earn a total of 102,140 from holding Sungwoo Electronics Co or generate 37.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daou Data Corp vs. Sungwoo Electronics Co
Performance |
| Timeline |
| Daou Data Corp |
| Sungwoo Electronics |
Daou Data and Sungwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Sungwoo Electronics
The main advantage of trading using opposite Daou Data and Sungwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Sungwoo Electronics 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 Sungwoo Electronics will offset losses from the drop in Sungwoo Electronics' 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 |
| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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