Correlation Between Korea Investment and Dawonsys CoLtd
Can any of the company-specific risk be diversified away by investing in both Korea Investment and Dawonsys CoLtd 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 Investment and Dawonsys CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and Dawonsys CoLtd, you can compare the effects of market volatilities on Korea Investment and Dawonsys CoLtd 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 Investment with a short position of Dawonsys CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Dawonsys CoLtd.
Diversification Opportunities for Korea Investment and Dawonsys CoLtd
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and Dawonsys is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Dawonsys CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawonsys CoLtd and Korea Investment 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 Investment Holdings are associated (or correlated) with Dawonsys CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawonsys CoLtd has no effect on the direction of Korea Investment i.e., Korea Investment and Dawonsys CoLtd go up and down completely randomly.
Pair Corralation between Korea Investment and Dawonsys CoLtd
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.71 times more return on investment than Dawonsys CoLtd. However, Korea Investment Holdings is 1.42 times less risky than Dawonsys CoLtd. It trades about 0.07 of its potential returns per unit of risk. Dawonsys CoLtd is currently generating about -0.05 per unit of risk. If you would invest 4,314,897 in Korea Investment Holdings on September 4, 2024 and sell it today you would earn a total of 1,145,103 from holding Korea Investment Holdings or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Korea Investment Holdings vs. Dawonsys CoLtd
Performance |
| Timeline |
| Korea Investment Holdings |
| Dawonsys CoLtd |
Korea Investment and Dawonsys CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Dawonsys CoLtd
The main advantage of trading using opposite Korea Investment and Dawonsys CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, Dawonsys CoLtd 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 Dawonsys CoLtd will offset losses from the drop in Dawonsys CoLtd's long position.| Korea Investment vs. AptaBio Therapeutics | Korea Investment vs. Daewoo SBI SPAC | Korea Investment vs. Dream Security co | Korea Investment vs. Microfriend |
| Dawonsys CoLtd vs. Global Standard Technology | Dawonsys CoLtd vs. Koh Young Technology | Dawonsys CoLtd vs. NewFlex Technology Co | Dawonsys CoLtd vs. KG Eco Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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