Correlation Between Puloon Technology and Digital Power
Can any of the company-specific risk be diversified away by investing in both Puloon Technology and Digital 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 Puloon Technology and Digital Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puloon Technology and Digital Power Communications, you can compare the effects of market volatilities on Puloon Technology and Digital 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 Puloon Technology with a short position of Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puloon Technology and Digital Power.
Diversification Opportunities for Puloon Technology and Digital Power
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Puloon and Digital is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Puloon Technology and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun and Puloon Technology 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 Puloon Technology are associated (or correlated) with Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of Puloon Technology i.e., Puloon Technology and Digital Power go up and down completely randomly.
Pair Corralation between Puloon Technology and Digital Power
Assuming the 90 days trading horizon Puloon Technology is expected to generate 5.36 times less return on investment than Digital Power. In addition to that, Puloon Technology is 1.49 times more volatile than Digital Power Communications. It trades about 0.01 of its total potential returns per unit of risk. Digital Power Communications is currently generating about 0.04 per unit of volatility. If you would invest 602,035 in Digital Power Communications on November 7, 2024 and sell it today you would earn a total of 227,965 from holding Digital Power Communications or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puloon Technology vs. Digital Power Communications
Performance |
| Timeline |
| Puloon Technology |
| Digital Power Commun |
Puloon Technology and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puloon Technology and Digital Power
The main advantage of trading using opposite Puloon Technology and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puloon Technology position performs unexpectedly, Digital 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 Digital Power will offset losses from the drop in Digital Power's long position.| Puloon Technology vs. Kumho Petro Chemical | Puloon Technology vs. Kukil Metal Co | Puloon Technology vs. Lotte Fine Chemical | Puloon Technology vs. LEENO Industrial |
| Digital Power vs. Daeduck Electronics Co | Digital Power vs. Incar Financial Service | Digital Power vs. Seoul Electronics Telecom | Digital Power vs. Industrial Bank |
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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