Correlation Between Daewoo Engineering and Haesung DS
Can any of the company-specific risk be diversified away by investing in both Daewoo Engineering and Haesung DS 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 Daewoo Engineering and Haesung DS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Engineering Construction and Haesung DS Co, you can compare the effects of market volatilities on Daewoo Engineering and Haesung DS 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 Daewoo Engineering with a short position of Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Engineering and Haesung DS.
Diversification Opportunities for Daewoo Engineering and Haesung DS
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daewoo and Haesung is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Engineering Constructio and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS and Daewoo Engineering 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 Daewoo Engineering Construction are associated (or correlated) with Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of Daewoo Engineering i.e., Daewoo Engineering and Haesung DS go up and down completely randomly.
Pair Corralation between Daewoo Engineering and Haesung DS
Assuming the 90 days trading horizon Daewoo Engineering Construction is expected to generate 0.66 times more return on investment than Haesung DS. However, Daewoo Engineering Construction is 1.52 times less risky than Haesung DS. It trades about -0.01 of its potential returns per unit of risk. Haesung DS Co is currently generating about -0.02 per unit of risk. If you would invest 428,500 in Daewoo Engineering Construction on November 27, 2024 and sell it today you would lose (69,500) from holding Daewoo Engineering Construction or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Engineering Constructio vs. Haesung DS Co
Performance |
| Timeline |
| Daewoo Engineering |
| Haesung DS |
Daewoo Engineering and Haesung DS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Engineering and Haesung DS
The main advantage of trading using opposite Daewoo Engineering and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Engineering position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.| Daewoo Engineering vs. Bookook Steel | Daewoo Engineering vs. Hyundai BNG Steel | Daewoo Engineering vs. GAMEVIL | Daewoo Engineering vs. Netmarble Games Corp |
| Haesung DS vs. Inzi Display CoLtd | Haesung DS vs. Lotte Non Life Insurance | Haesung DS vs. GAMEVIL | Haesung DS vs. Dongbu Insurance Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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