Correlation Between Daejoo Electronic and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Daejoo Electronic and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on Daejoo Electronic and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejoo Electronic and Wireless Power.
Diversification Opportunities for Daejoo Electronic and Wireless Power
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daejoo and Wireless is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Daejoo Electronic Materials and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Daejoo Electronic i.e., Daejoo Electronic and Wireless Power go up and down completely randomly.
Pair Corralation between Daejoo Electronic and Wireless Power
Assuming the 90 days trading horizon Daejoo Electronic Materials is expected to under-perform the Wireless Power. In addition to that, Daejoo Electronic is 1.7 times more volatile than Wireless Power Amplifier. It trades about -0.26 of its total potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.34 per unit of volatility. If you would invest 255,000 in Wireless Power Amplifier on August 29, 2024 and sell it today you would lose (36,500) from holding Wireless Power Amplifier or give up 14.31% 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. Wireless Power Amplifier
Performance |
| Timeline |
| Daejoo Electronic |
| Wireless Power Amplifier |
Daejoo Electronic and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejoo Electronic and Wireless Power
The main advantage of trading using opposite Daejoo Electronic and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejoo Electronic position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.The idea behind Daejoo Electronic Materials and Wireless Power Amplifier 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.| Wireless Power vs. Busan Industrial Co | Wireless Power vs. Hyunwoo Industrial Co | Wireless Power vs. Haesung Industrial Co | Wireless Power vs. Dongbang Transport Logistics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |