Correlation Between Jeong Moon and Daou Data
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Daou Data 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 Jeong Moon and Daou Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and Daou Data Corp, you can compare the effects of market volatilities on Jeong Moon and Daou Data 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 Jeong Moon with a short position of Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Daou Data.
Diversification Opportunities for Jeong Moon and Daou Data
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeong and Daou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Jeong Moon i.e., Jeong Moon and Daou Data go up and down completely randomly.
Pair Corralation between Jeong Moon and Daou Data
Assuming the 90 days trading horizon Jeong Moon Information is expected to generate 0.6 times more return on investment than Daou Data. However, Jeong Moon Information is 1.66 times less risky than Daou Data. It trades about -0.03 of its potential returns per unit of risk. Daou Data Corp is currently generating about -0.04 per unit of risk. If you would invest 130,000 in Jeong Moon Information on September 3, 2024 and sell it today you would lose (41,700) from holding Jeong Moon Information or give up 32.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Daou Data Corp
Performance |
| Timeline |
| Jeong Moon Information |
| Daou Data Corp |
Jeong Moon and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Daou Data
The main advantage of trading using opposite Jeong Moon and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Jeong Moon vs. Dongsin Engineering Construction | Jeong Moon vs. Doosan Fuel Cell | Jeong Moon vs. Daishin Balance 1 | Jeong Moon vs. Total Soft Bank |
| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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