Correlation Between Daewon Media and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Youngsin Metal 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 Youngsin Metal 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 Youngsin Metal Industrial, you can compare the effects of market volatilities on Daewon Media and Youngsin Metal 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 Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Youngsin Metal.
Diversification Opportunities for Daewon Media and Youngsin Metal
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daewon and Youngsin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial 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 Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Daewon Media i.e., Daewon Media and Youngsin Metal go up and down completely randomly.
Pair Corralation between Daewon Media and Youngsin Metal
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 2.15 times more return on investment than Youngsin Metal. However, Daewon Media is 2.15 times more volatile than Youngsin Metal Industrial. It trades about 0.13 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about -0.26 per unit of risk. If you would invest 771,831 in Daewon Media Co on October 25, 2024 and sell it today you would earn a total of 58,169 from holding Daewon Media Co or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Media Co vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Daewon Media |
| Youngsin Metal Industrial |
Daewon Media and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Youngsin Metal
The main advantage of trading using opposite Daewon Media and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Daewon Media vs. Daishin Information Communications | Daewon Media vs. Automobile Pc | Daewon Media vs. Digital Power Communications | Daewon Media vs. Mobile Appliance |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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