Correlation Between UIL and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both UIL and DAEDUCK ELECTRONICS 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 UIL and DAEDUCK ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UIL Co and DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on UIL and DAEDUCK ELECTRONICS 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 UIL with a short position of DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UIL and DAEDUCK ELECTRONICS.
Diversification Opportunities for UIL and DAEDUCK ELECTRONICS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UIL and DAEDUCK is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UIL Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd and UIL 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 UIL Co are associated (or correlated) with DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of UIL i.e., UIL and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between UIL and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon UIL Co is expected to generate 1.47 times more return on investment than DAEDUCK ELECTRONICS. However, UIL is 1.47 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.05 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.05 per unit of risk. If you would invest 503,000 in UIL Co on September 12, 2024 and sell it today you would earn a total of 14,000 from holding UIL Co or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UIL Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| UIL Co |
| DAEDUCK ELECTRONICS CoLtd |
UIL and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UIL and DAEDUCK ELECTRONICS
The main advantage of trading using opposite UIL and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UIL position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| UIL vs. LG Household Healthcare | UIL vs. Display Tech Co | UIL vs. CJ Seafood Corp | UIL vs. Aprogen Healthcare Games |
| DAEDUCK ELECTRONICS vs. Korea Computer | DAEDUCK ELECTRONICS vs. Duksan Hi Metal | DAEDUCK ELECTRONICS vs. LG Display Co | DAEDUCK ELECTRONICS vs. Shinsegae Information 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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