Correlation Between Daou Data and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Daou Data and Hyosung Heavy 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 Hyosung Heavy 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 Hyosung Heavy Industries, you can compare the effects of market volatilities on Daou Data and Hyosung Heavy 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 Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Hyosung Heavy.
Diversification Opportunities for Daou Data and Hyosung Heavy
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daou and Hyosung is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries 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 Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of Daou Data i.e., Daou Data and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Daou Data and Hyosung Heavy
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Hyosung Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Daou Data Corp is 2.53 times less risky than Hyosung Heavy. The stock trades about -0.02 of its potential returns per unit of risk. The Hyosung Heavy Industries is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17,783,300 in Hyosung Heavy Industries on September 3, 2024 and sell it today you would earn a total of 22,566,700 from holding Hyosung Heavy Industries or generate 126.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Hyosung Heavy Industries
Performance |
| Timeline |
| Daou Data Corp |
| Hyosung Heavy Industries |
Daou Data and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Hyosung Heavy
The main advantage of trading using opposite Daou Data and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data position performs unexpectedly, Hyosung Heavy 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy's long position.| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
| Hyosung Heavy vs. System and Application | Hyosung Heavy vs. SK Chemicals Co | Hyosung Heavy vs. Korea Information Engineering | Hyosung Heavy vs. Daou Data Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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