Correlation Between DIGITAL CHOSUN and Raontech
Can any of the company-specific risk be diversified away by investing in both DIGITAL CHOSUN and Raontech 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 Raontech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIGITAL CHOSUN and Raontech, you can compare the effects of market volatilities on DIGITAL CHOSUN and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIGITAL CHOSUN and Raontech.
Diversification Opportunities for DIGITAL CHOSUN and Raontech
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DIGITAL and Raontech is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding DIGITAL CHOSUN and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of DIGITAL CHOSUN i.e., DIGITAL CHOSUN and Raontech go up and down completely randomly.
Pair Corralation between DIGITAL CHOSUN and Raontech
Assuming the 90 days trading horizon DIGITAL CHOSUN is expected to under-perform the Raontech. But the stock apears to be less risky and, when comparing its historical volatility, DIGITAL CHOSUN is 1.77 times less risky than Raontech. The stock trades about -0.04 of its potential returns per unit of risk. The Raontech is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 305,500 in Raontech on September 28, 2024 and sell it today you would earn a total of 48,500 from holding Raontech or generate 15.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIGITAL CHOSUN vs. Raontech
Performance |
| Timeline |
| DIGITAL CHOSUN |
| Raontech |
DIGITAL CHOSUN and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIGITAL CHOSUN and Raontech
The main advantage of trading using opposite DIGITAL CHOSUN and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIGITAL CHOSUN position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| DIGITAL CHOSUN vs. Raontech | DIGITAL CHOSUN vs. Seoul Food Industrial | DIGITAL CHOSUN vs. PH Tech Co | DIGITAL CHOSUN vs. Shinsegae Food |
| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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