Correlation Between Daejoo Electronic and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Daejoo Electronic and Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial Co, you can compare the effects of market volatilities on Daejoo Electronic and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo Electronic and Haesung Industrial.
Diversification Opportunities for Daejoo Electronic and Haesung Industrial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daejoo and Haesung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Electronic Materials and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Daejoo Electronic i.e., Daejoo Electronic and Haesung Industrial go up and down completely randomly.
Pair Corralation between Daejoo Electronic and Haesung Industrial
Assuming the 90 days trading horizon Daejoo Electronic Materials is expected to under-perform the Haesung Industrial. In addition to that, Daejoo Electronic is 2.14 times more volatile than Haesung Industrial Co. It trades about -0.33 of its total potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.33 per unit of volatility. If you would invest 670,000 in Haesung Industrial Co on September 1, 2024 and sell it today you would lose (77,000) from holding Haesung Industrial Co or give up 11.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejoo Electronic Materials vs. Haesung Industrial Co
Performance |
| Timeline |
| Daejoo Electronic |
| Haesung Industrial |
Daejoo Electronic and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo Electronic and Haesung Industrial
The main advantage of trading using opposite Daejoo Electronic and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo Electronic position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Daejoo Electronic vs. Dongsin Engineering Construction | Daejoo Electronic vs. Doosan Fuel Cell | Daejoo Electronic vs. Daishin Balance 1 | Daejoo Electronic vs. Total Soft Bank |
| Haesung Industrial vs. Daejoo Electronic Materials | Haesung Industrial vs. Bohae Brewery | Haesung Industrial vs. Sungdo Engineering Construction | Haesung Industrial vs. Cuckoo Electronics 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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