Correlation Between Korea Computer and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Korea Computer 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 Korea Computer and DAEDUCK ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Korea Computer 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 Korea Computer with a short position of DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and DAEDUCK ELECTRONICS.
Diversification Opportunities for Korea Computer and DAEDUCK ELECTRONICS
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and DAEDUCK is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer 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 Korea Computer 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 Korea Computer 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 Korea Computer i.e., Korea Computer and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Korea Computer and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.78 times more return on investment than DAEDUCK ELECTRONICS. However, Korea Computer is 1.78 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.03 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.02 per unit of risk. If you would invest 393,211 in Korea Computer on September 13, 2024 and sell it today you would earn a total of 127,789 from holding Korea Computer or generate 32.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Korea Computer |
| DAEDUCK ELECTRONICS CoLtd |
Korea Computer and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Korea Computer and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer 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.| Korea Computer vs. Cube Entertainment | Korea Computer vs. Dreamus Company | Korea Computer vs. LG Energy Solution | Korea Computer vs. Dongwon System |
| DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Sungmoon Electronics Co | DAEDUCK ELECTRONICS vs. Solution Advanced Technology | DAEDUCK ELECTRONICS vs. Busan Industrial Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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