Correlation Between Daewon Media and Sang A
Can any of the company-specific risk be diversified away by investing in both Daewon Media and Sang A 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 Sang A 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 Sang A Frontec CoLtd, you can compare the effects of market volatilities on Daewon Media and Sang A 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 Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Media and Sang A.
Diversification Opportunities for Daewon Media and Sang A
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daewon and Sang is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Media Co and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec 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 Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of Daewon Media i.e., Daewon Media and Sang A go up and down completely randomly.
Pair Corralation between Daewon Media and Sang A
Assuming the 90 days trading horizon Daewon Media Co is expected to generate 0.65 times more return on investment than Sang A. However, Daewon Media Co is 1.54 times less risky than Sang A. It trades about -0.02 of its potential returns per unit of risk. Sang A Frontec CoLtd is currently generating about -0.02 per unit of risk. If you would invest 968,243 in Daewon Media Co on October 14, 2024 and sell it today you would lose (95,243) from holding Daewon Media Co or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Media Co vs. Sang A Frontec CoLtd
Performance |
| Timeline |
| Daewon Media |
| Sang A Frontec |
Daewon Media and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Media and Sang A
The main advantage of trading using opposite Daewon Media and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Media position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.| Daewon Media vs. iNtRON Biotechnology | Daewon Media vs. Jeju Air Co | Daewon Media vs. Woori Technology | Daewon Media vs. Cloud Air CoLtd |
| Sang A vs. MediaZen | Sang A vs. Pan Entertainment Co | Sang A vs. SAMG Entertainment Co | Sang A vs. Lotte Data Communication |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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