Correlation Between Daejoo Electronic and Sam Chun
Can any of the company-specific risk be diversified away by investing in both Daejoo Electronic and Sam Chun 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 Daejoo Electronic and Sam Chun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejoo Electronic Materials and Sam Chun Dang, you can compare the effects of market volatilities on Daejoo Electronic and Sam Chun 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 Daejoo Electronic with a short position of Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo Electronic and Sam Chun.
Diversification Opportunities for Daejoo Electronic and Sam Chun
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daejoo and Sam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Electronic Materials and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang and Daejoo Electronic 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 Daejoo Electronic Materials are associated (or correlated) with Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Daejoo Electronic i.e., Daejoo Electronic and Sam Chun go up and down completely randomly.
Pair Corralation between Daejoo Electronic and Sam Chun
Assuming the 90 days trading horizon Daejoo Electronic is expected to generate 5.91 times less return on investment than Sam Chun. But when comparing it to its historical volatility, Daejoo Electronic Materials is 1.34 times less risky than Sam Chun. It trades about 0.01 of its potential returns per unit of risk. Sam Chun Dang is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,820,000 in Sam Chun Dang on September 12, 2024 and sell it today you would earn a total of 3,980,000 from holding Sam Chun Dang or generate 68.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejoo Electronic Materials vs. Sam Chun Dang
Performance |
| Timeline |
| Daejoo Electronic |
| Sam Chun Dang |
Daejoo Electronic and Sam Chun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo Electronic and Sam Chun
The main advantage of trading using opposite Daejoo Electronic and Sam Chun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo Electronic position performs unexpectedly, Sam Chun 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 Sam Chun will offset losses from the drop in Sam Chun's long position.| Daejoo Electronic vs. Cube Entertainment | Daejoo Electronic vs. Dreamus Company | Daejoo Electronic vs. LG Energy Solution | Daejoo Electronic vs. Dongwon 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |