Correlation Between Daewon Media and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Hanshin Construction 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 Daewon Media and Hanshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewon Media Co and Hanshin Construction Co, you can compare the effects of market volatilities on Daewon Media and Hanshin Construction 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 Daewon Media with a short position of Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Hanshin Construction.
Diversification Opportunities for Daewon Media and Hanshin Construction
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewon and Hanshin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction and Daewon Media 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 Daewon Media Co are associated (or correlated) with Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Daewon Media i.e., Daewon Media and Hanshin Construction go up and down completely randomly.
Pair Corralation between Daewon Media and Hanshin Construction
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 3.4 times more return on investment than Hanshin Construction. However, Daewon Media is 3.4 times more volatile than Hanshin Construction Co. It trades about 0.18 of its potential returns per unit of risk. Hanshin Construction Co is currently generating about -0.08 per unit of risk. If you would invest 764,000 in Daewon Media Co on October 29, 2024 and sell it today you would earn a total of 79,000 from holding Daewon Media Co or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Media Co vs. Hanshin Construction Co
Performance |
| Timeline |
| Daewon Media |
| Hanshin Construction |
Daewon Media and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Hanshin Construction
The main advantage of trading using opposite Daewon Media and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Daewon Media vs. Stic Investments | Daewon Media vs. Korean Drug Co | Daewon Media vs. Samyang Foods Co | Daewon Media vs. Sewoon Medical Co |
| Hanshin Construction vs. GS Retail Co | Hanshin Construction vs. Insung Information Co | Hanshin Construction vs. Jeong Moon Information | Hanshin Construction vs. Koryo Credit Information |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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