Correlation Between Mobile Appliance and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Daewon Media 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 Mobile Appliance and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Daewon Media Co, you can compare the effects of market volatilities on Mobile Appliance and Daewon Media 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 Mobile Appliance with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Daewon Media.
Diversification Opportunities for Mobile Appliance and Daewon Media
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mobile and Daewon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Daewon Media go up and down completely randomly.
Pair Corralation between Mobile Appliance and Daewon Media
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 0.75 times more return on investment than Daewon Media. However, Mobile Appliance is 1.33 times less risky than Daewon Media. It trades about 0.24 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.08 per unit of risk. If you would invest 211,000 in Mobile Appliance on November 4, 2024 and sell it today you would earn a total of 18,000 from holding Mobile Appliance or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Daewon Media Co
Performance |
| Timeline |
| Mobile Appliance |
| Daewon Media |
Mobile Appliance and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Daewon Media
The main advantage of trading using opposite Mobile Appliance and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Mobile Appliance vs. WONIK Materials CoLtd | Mobile Appliance vs. TOPMATERIAL LTD | Mobile Appliance vs. EV Advanced Material | Mobile Appliance vs. Hyosung Advanced Materials |
| Daewon Media vs. Stic Investments | Daewon Media vs. SV Investment | Daewon Media vs. Woori Technology Investment | Daewon Media vs. Korea Investment Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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