Correlation Between Daehan Steel and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Daehan Steel 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 Daehan Steel and Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Wireless Power Amplifier, you can compare the effects of market volatilities on Daehan Steel 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 Daehan Steel with a short position of Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Wireless Power.
Diversification Opportunities for Daehan Steel and Wireless Power
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daehan and Wireless is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel 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 Daehan Steel 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 Daehan Steel 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 Daehan Steel i.e., Daehan Steel and Wireless Power go up and down completely randomly.
Pair Corralation between Daehan Steel and Wireless Power
Assuming the 90 days trading horizon Daehan Steel is expected to generate 2574.8 times less return on investment than Wireless Power. But when comparing it to its historical volatility, Daehan Steel is 6.1 times less risky than Wireless Power. It trades about 0.0 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 255,000 in Wireless Power Amplifier on October 25, 2024 and sell it today you would earn a total of 140,500 from holding Wireless Power Amplifier or generate 55.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Wireless Power Amplifier
Performance |
| Timeline |
| Daehan Steel |
| Wireless Power Amplifier |
Daehan Steel and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Wireless Power
The main advantage of trading using opposite Daehan Steel and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel 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.| Daehan Steel vs. Wireless Power Amplifier | Daehan Steel vs. Ssangyong Information Communication | Daehan Steel vs. Shinil Industrial Co | Daehan Steel vs. Korea Air Svc |
| Wireless Power vs. SK Chemicals Co | Wireless Power vs. Daewon Chemical Co | Wireless Power vs. TK Chemical | Wireless Power vs. Hannong Chemicals |
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 Stocks Directory module to find actively traded stocks across global markets.
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