Correlation Between Display Tech and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Display Tech and Daesung Hi 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 Display Tech and Daesung Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Daesung Hi Tech Co, you can compare the effects of market volatilities on Display Tech and Daesung Hi 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 Display Tech with a short position of Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Daesung Hi.
Diversification Opportunities for Display Tech and Daesung Hi
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Display and Daesung is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech and Display Tech 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 Display Tech Co are associated (or correlated) with Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Display Tech i.e., Display Tech and Daesung Hi go up and down completely randomly.
Pair Corralation between Display Tech and Daesung Hi
Assuming the 90 days trading horizon Display Tech Co is expected to generate 0.53 times more return on investment than Daesung Hi. However, Display Tech Co is 1.88 times less risky than Daesung Hi. It trades about 0.26 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.17 per unit of risk. If you would invest 287,000 in Display Tech Co on November 3, 2024 and sell it today you would earn a total of 18,000 from holding Display Tech Co or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Daesung Hi Tech Co
Performance |
| Timeline |
| Display Tech |
| Daesung Hi Tech |
Display Tech and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Daesung Hi
The main advantage of trading using opposite Display Tech and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| Display Tech vs. Golden Bridge Investment | Display Tech vs. DB Financial Investment | Display Tech vs. EBEST Investment Securities | Display Tech vs. DONGKUK TED METAL |
| Daesung Hi vs. Lotte Data Communication | Daesung Hi vs. Hanjin Transportation Co | Daesung Hi vs. Bookook Steel | Daesung Hi vs. Fine Besteel 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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