Correlation Between Daejoo Electronic and BH
Can any of the company-specific risk be diversified away by investing in both Daejoo Electronic and BH 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 BH 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 BH Co, you can compare the effects of market volatilities on Daejoo Electronic and BH 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 BH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo Electronic and BH.
Diversification Opportunities for Daejoo Electronic and BH
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejoo and BH is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Electronic Materials and BH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Co 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 BH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Co has no effect on the direction of Daejoo Electronic i.e., Daejoo Electronic and BH go up and down completely randomly.
Pair Corralation between Daejoo Electronic and BH
Assuming the 90 days trading horizon Daejoo Electronic Materials is expected to under-perform the BH. In addition to that, Daejoo Electronic is 1.26 times more volatile than BH Co. It trades about -0.3 of its total potential returns per unit of risk. BH Co is currently generating about -0.01 per unit of volatility. If you would invest 1,650,000 in BH Co on August 31, 2024 and sell it today you would lose (23,000) from holding BH Co or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejoo Electronic Materials vs. BH Co
Performance |
| Timeline |
| Daejoo Electronic |
| BH Co |
Daejoo Electronic and BH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo Electronic and BH
The main advantage of trading using opposite Daejoo Electronic and BH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo Electronic position performs unexpectedly, BH 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 BH will offset losses from the drop in BH'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |