Correlation Between Daejoo Electronic and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both Daejoo Electronic and Chorokbaem Healthcare 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 Chorokbaem Healthcare 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 Chorokbaem Healthcare Co, you can compare the effects of market volatilities on Daejoo Electronic and Chorokbaem Healthcare 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo Electronic and Chorokbaem Healthcare.
Diversification Opportunities for Daejoo Electronic and Chorokbaem Healthcare
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejoo and Chorokbaem is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Electronic Materials and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of Daejoo Electronic i.e., Daejoo Electronic and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between Daejoo Electronic and Chorokbaem Healthcare
Assuming the 90 days trading horizon Daejoo Electronic Materials is expected to generate 1.18 times more return on investment than Chorokbaem Healthcare. However, Daejoo Electronic is 1.18 times more volatile than Chorokbaem Healthcare Co. It trades about 0.02 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about -0.03 per unit of risk. If you would invest 7,839,784 in Daejoo Electronic Materials on September 3, 2024 and sell it today you would earn a total of 470,216 from holding Daejoo Electronic Materials or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejoo Electronic Materials vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| Daejoo Electronic |
| Chorokbaem Healthcare |
Daejoo Electronic and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo Electronic and Chorokbaem Healthcare
The main advantage of trading using opposite Daejoo Electronic and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo Electronic position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.The idea behind Daejoo Electronic Materials and Chorokbaem Healthcare Co 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.| Chorokbaem Healthcare vs. Sunny Electronics Corp | Chorokbaem Healthcare vs. Solution Advanced Technology | Chorokbaem Healthcare vs. Dongil Technology | Chorokbaem Healthcare vs. Daejoo Electronic Materials |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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