Correlation Between Global Standard and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Global Standard and Daishin Balance 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 Daishin Balance 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 Daishin Balance No8, you can compare the effects of market volatilities on Global Standard and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Daishin Balance.
Diversification Opportunities for Global Standard and Daishin Balance
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Daishin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of Global Standard i.e., Global Standard and Daishin Balance go up and down completely randomly.
Pair Corralation between Global Standard and Daishin Balance
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 0.99 times more return on investment than Daishin Balance. However, Global Standard Technology is 1.01 times less risky than Daishin Balance. It trades about -0.09 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about -0.15 per unit of risk. If you would invest 2,472,500 in Global Standard Technology on September 3, 2024 and sell it today you would lose (1,072,500) from holding Global Standard Technology or give up 43.38% 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. Daishin Balance No8
Performance |
| Timeline |
| Global Standard Tech |
| Daishin Balance No8 |
Global Standard and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Daishin Balance
The main advantage of trading using opposite Global Standard and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
| Daishin Balance vs. Hwangkum Steel Technology | Daishin Balance vs. Duksan Hi Metal | Daishin Balance vs. Dongil Metal Co | Daishin Balance vs. Global Standard Technology |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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