Correlation Between AfreecaTV and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both AfreecaTV and Daishin Balance 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 AfreecaTV and Daishin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfreecaTV Co and Daishin Balance No8, you can compare the effects of market volatilities on AfreecaTV and Daishin Balance 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 AfreecaTV with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfreecaTV and Daishin Balance.
Diversification Opportunities for AfreecaTV and Daishin Balance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AfreecaTV and Daishin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AfreecaTV Co and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 and AfreecaTV 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 AfreecaTV Co are associated (or correlated) with Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of AfreecaTV i.e., AfreecaTV and Daishin Balance go up and down completely randomly.
Pair Corralation between AfreecaTV and Daishin Balance
Assuming the 90 days trading horizon AfreecaTV Co is expected to generate 1.01 times more return on investment than Daishin Balance. However, AfreecaTV is 1.01 times more volatile than Daishin Balance No8. It trades about 0.04 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about -0.03 per unit of risk. If you would invest 7,463,452 in AfreecaTV Co on August 27, 2024 and sell it today you would earn a total of 2,186,548 from holding AfreecaTV Co or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AfreecaTV Co vs. Daishin Balance No8
Performance |
| Timeline |
| AfreecaTV |
| Daishin Balance No8 |
AfreecaTV and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfreecaTV and Daishin Balance
The main advantage of trading using opposite AfreecaTV and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfreecaTV position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.The idea behind AfreecaTV Co and Daishin Balance No8 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Daishin Balance vs. Pureun Mutual Savings | Daishin Balance vs. Coloray International Investment | Daishin Balance vs. Cuckoo Homesys Co | Daishin Balance vs. Sangsangin Investment Securities |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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