Correlation Between DAEA TI and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both DAEA TI and Daejoo Electronic 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 DAEA TI and Daejoo Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEA TI Co and Daejoo Electronic Materials, you can compare the effects of market volatilities on DAEA TI and Daejoo Electronic 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 DAEA TI with a short position of Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEA TI and Daejoo Electronic.
Diversification Opportunities for DAEA TI and Daejoo Electronic
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAEA and Daejoo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding DAEA TI Co and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic and DAEA TI 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 DAEA TI Co are associated (or correlated) with Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of DAEA TI i.e., DAEA TI and Daejoo Electronic go up and down completely randomly.
Pair Corralation between DAEA TI and Daejoo Electronic
Assuming the 90 days trading horizon DAEA TI Co is expected to generate 0.51 times more return on investment than Daejoo Electronic. However, DAEA TI Co is 1.97 times less risky than Daejoo Electronic. It trades about -0.03 of its potential returns per unit of risk. Daejoo Electronic Materials is currently generating about -0.04 per unit of risk. If you would invest 310,000 in DAEA TI Co on August 31, 2024 and sell it today you would lose (33,500) from holding DAEA TI Co or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEA TI Co vs. Daejoo Electronic Materials
Performance |
| Timeline |
| DAEA TI |
| Daejoo Electronic |
DAEA TI and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEA TI and Daejoo Electronic
The main advantage of trading using opposite DAEA TI and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEA TI position performs unexpectedly, Daejoo Electronic 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic's long position.| DAEA TI vs. Dongsin Engineering Construction | DAEA TI vs. Doosan Fuel Cell | DAEA TI vs. Daishin Balance 1 | DAEA TI vs. Total Soft Bank |
| Daejoo Electronic vs. Dongsin Engineering Construction | Daejoo Electronic vs. Doosan Fuel Cell | Daejoo Electronic vs. Daishin Balance 1 | Daejoo Electronic vs. Total Soft Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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