Correlation Between GemVaxKAEL CoLtd and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and DIGITAL CHOSUN 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 GemVaxKAEL CoLtd and DIGITAL CHOSUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and DIGITAL CHOSUN, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and DIGITAL CHOSUN 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 GemVaxKAEL CoLtd with a short position of DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and DIGITAL CHOSUN.
Diversification Opportunities for GemVaxKAEL CoLtd and DIGITAL CHOSUN
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GemVaxKAEL and DIGITAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and DIGITAL CHOSUN
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 2.2 times more return on investment than DIGITAL CHOSUN. However, GemVaxKAEL CoLtd is 2.2 times more volatile than DIGITAL CHOSUN. It trades about 0.1 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about 0.04 per unit of risk. If you would invest 1,248,000 in GemVaxKAEL CoLtd on September 22, 2024 and sell it today you would earn a total of 137,000 from holding GemVaxKAEL CoLtd or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. DIGITAL CHOSUN
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| DIGITAL CHOSUN |
GemVaxKAEL CoLtd and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and DIGITAL CHOSUN
The main advantage of trading using opposite GemVaxKAEL CoLtd and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| GemVaxKAEL CoLtd vs. Dongsin Engineering Construction | GemVaxKAEL CoLtd vs. Doosan Fuel Cell | GemVaxKAEL CoLtd vs. Daishin Balance 1 | GemVaxKAEL CoLtd vs. Total Soft Bank |
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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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