Correlation Between Koh Young and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both Koh Young and Digital Imaging 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 Koh Young and Digital Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and Digital Imaging Technology, you can compare the effects of market volatilities on Koh Young and Digital Imaging 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 Koh Young with a short position of Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Digital Imaging.
Diversification Opportunities for Koh Young and Digital Imaging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Koh and Digital is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech and Koh Young 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 Koh Young Technology are associated (or correlated) with Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of Koh Young i.e., Koh Young and Digital Imaging go up and down completely randomly.
Pair Corralation between Koh Young and Digital Imaging
Assuming the 90 days trading horizon Koh Young is expected to generate 13.39 times less return on investment than Digital Imaging. But when comparing it to its historical volatility, Koh Young Technology is 1.91 times less risky than Digital Imaging. It trades about 0.03 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,092,000 in Digital Imaging Technology on September 20, 2024 and sell it today you would earn a total of 211,000 from holding Digital Imaging Technology or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Koh Young Technology vs. Digital Imaging Technology
Performance |
| Timeline |
| Koh Young Technology |
| Digital Imaging Tech |
Koh Young and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Digital Imaging
The main advantage of trading using opposite Koh Young and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Digital Imaging 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 Imaging will offset losses from the drop in Digital Imaging's long position.The idea behind Koh Young Technology and Digital Imaging Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Digital Imaging vs. Nice Information Telecommunication | Digital Imaging vs. Aprogen Healthcare Games | Digital Imaging vs. CKH Food Health | Digital Imaging vs. Insung Information Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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