Correlation Between DIGITAL CHOSUN and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both DIGITAL CHOSUN and Chorokbaem Healthcare 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 DIGITAL CHOSUN and Chorokbaem Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIGITAL CHOSUN and Chorokbaem Healthcare Co, you can compare the effects of market volatilities on DIGITAL CHOSUN and Chorokbaem Healthcare 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 DIGITAL CHOSUN with a short position of Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIGITAL CHOSUN and Chorokbaem Healthcare.
Diversification Opportunities for DIGITAL CHOSUN and Chorokbaem Healthcare
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between DIGITAL and Chorokbaem is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding DIGITAL CHOSUN and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare and DIGITAL CHOSUN 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 DIGITAL CHOSUN are associated (or correlated) with Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of DIGITAL CHOSUN i.e., DIGITAL CHOSUN and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between DIGITAL CHOSUN and Chorokbaem Healthcare
Assuming the 90 days trading horizon DIGITAL CHOSUN is expected to generate 1.42 times more return on investment than Chorokbaem Healthcare. However, DIGITAL CHOSUN is 1.42 times more volatile than Chorokbaem Healthcare Co. It trades about 0.12 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about -0.15 per unit of risk. If you would invest 168,000 in DIGITAL CHOSUN on September 19, 2024 and sell it today you would earn a total of 11,300 from holding DIGITAL CHOSUN or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DIGITAL CHOSUN vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| DIGITAL CHOSUN |
| Chorokbaem Healthcare |
DIGITAL CHOSUN and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIGITAL CHOSUN and Chorokbaem Healthcare
The main advantage of trading using opposite DIGITAL CHOSUN and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIGITAL CHOSUN position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| DIGITAL CHOSUN vs. Chorokbaem Healthcare Co | DIGITAL CHOSUN vs. Samhwa Paint Industrial | DIGITAL CHOSUN vs. CKH Food Health | DIGITAL CHOSUN vs. Youngsin Metal Industrial |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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