Correlation Between Daou Data and TES
Can any of the company-specific risk be diversified away by investing in both Daou Data and TES 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 TES 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 TES Co, you can compare the effects of market volatilities on Daou Data and TES 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 TES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and TES.
Diversification Opportunities for Daou Data and TES
Weak diversification
The 3 months correlation between Daou and TES is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and TES Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TES Co 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 TES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TES Co has no effect on the direction of Daou Data i.e., Daou Data and TES go up and down completely randomly.
Pair Corralation between Daou Data and TES
Assuming the 90 days trading horizon Daou Data Corp is expected to generate 0.55 times more return on investment than TES. However, Daou Data Corp is 1.8 times less risky than TES. It trades about -0.03 of its potential returns per unit of risk. TES Co is currently generating about -0.11 per unit of risk. If you would invest 1,175,000 in Daou Data Corp on September 1, 2024 and sell it today you would lose (94,000) from holding Daou Data Corp or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. TES Co
Performance |
| Timeline |
| Daou Data Corp |
| TES Co |
Daou Data and TES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and TES
The main advantage of trading using opposite Daou Data and TES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, TES 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 TES will offset losses from the drop in TES's long position.| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
| TES vs. Wonik Ips Co | TES vs. Eugene Technology CoLtd | TES vs. SFA Engineering | TES vs. Tokai Carbon Korea |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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