Correlation Between Elentec and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Elentec and Daebo Magnetic 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 Elentec and Daebo Magnetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elentec Co and Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Elentec and Daebo Magnetic 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 Elentec with a short position of Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elentec and Daebo Magnetic.
Diversification Opportunities for Elentec and Daebo Magnetic
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elentec and Daebo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elentec Co and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd and Elentec 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 Elentec Co are associated (or correlated) with Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Elentec i.e., Elentec and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Elentec and Daebo Magnetic
Assuming the 90 days trading horizon Elentec Co is expected to generate 0.45 times more return on investment than Daebo Magnetic. However, Elentec Co is 2.23 times less risky than Daebo Magnetic. It trades about -0.31 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.31 per unit of risk. If you would invest 515,000 in Elentec Co on November 2, 2024 and sell it today you would lose (26,500) from holding Elentec Co or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elentec Co vs. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Elentec |
| Daebo Magnetic CoLtd |
Elentec and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elentec and Daebo Magnetic
The main advantage of trading using opposite Elentec and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elentec position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Elentec vs. Samsung Electronics Co | Elentec vs. Samsung Electronics Co | Elentec vs. KB Financial Group | Elentec vs. Shinhan Financial Group |
| Daebo Magnetic vs. Dawonsys CoLtd | Daebo Magnetic vs. Elentec Co | Daebo Magnetic vs. Robostar CoLtd | Daebo Magnetic vs. HyVision 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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