Correlation Between Global Standard and Dawonsys CoLtd
Can any of the company-specific risk be diversified away by investing in both Global Standard and Dawonsys CoLtd 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 Global Standard and Dawonsys CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Dawonsys CoLtd, you can compare the effects of market volatilities on Global Standard and Dawonsys CoLtd 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 Global Standard with a short position of Dawonsys CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Dawonsys CoLtd.
Diversification Opportunities for Global Standard and Dawonsys CoLtd
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Dawonsys is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Dawonsys CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawonsys CoLtd and Global Standard 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 Global Standard Technology are associated (or correlated) with Dawonsys CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawonsys CoLtd has no effect on the direction of Global Standard i.e., Global Standard and Dawonsys CoLtd go up and down completely randomly.
Pair Corralation between Global Standard and Dawonsys CoLtd
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 1.85 times more return on investment than Dawonsys CoLtd. However, Global Standard is 1.85 times more volatile than Dawonsys CoLtd. It trades about -0.01 of its potential returns per unit of risk. Dawonsys CoLtd is currently generating about -0.21 per unit of risk. If you would invest 1,576,000 in Global Standard Technology on September 12, 2024 and sell it today you would lose (44,000) from holding Global Standard Technology or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Dawonsys CoLtd
Performance |
| Timeline |
| Global Standard Tech |
| Dawonsys CoLtd |
Global Standard and Dawonsys CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Dawonsys CoLtd
The main advantage of trading using opposite Global Standard and Dawonsys CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard position performs unexpectedly, Dawonsys CoLtd 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 Dawonsys CoLtd will offset losses from the drop in Dawonsys CoLtd's long position.| Global Standard vs. Cube Entertainment | Global Standard vs. Dreamus Company | Global Standard vs. LG Energy Solution | Global Standard vs. Dongwon System |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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