Correlation Between Daewon Media and Insung Information
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Daewon Media and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Insung Information.
Diversification Opportunities for Daewon Media and Insung Information
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daewon and Insung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Daewon Media i.e., Daewon Media and Insung Information go up and down completely randomly.
Pair Corralation between Daewon Media and Insung Information
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 0.57 times more return on investment than Insung Information. However, Daewon Media Co is 1.75 times less risky than Insung Information. It trades about 0.09 of its potential returns per unit of risk. Insung Information Co is currently generating about 0.01 per unit of risk. If you would invest 747,000 in Daewon Media Co on September 21, 2024 and sell it today you would earn a total of 29,000 from holding Daewon Media Co or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Media Co vs. Insung Information Co
Performance |
| Timeline |
| Daewon Media |
| Insung Information |
Daewon Media and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Insung Information
The main advantage of trading using opposite Daewon Media and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Daewon Media vs. ECSTELECOM Co | Daewon Media vs. Nice Information Telecommunication | Daewon Media vs. Daishin Information Communications | Daewon Media vs. Aprogen Healthcare Games |
| Insung Information vs. Cube Entertainment | Insung Information vs. Dreamus Company | Insung Information vs. LG Energy Solution | Insung Information vs. Dongwon System |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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