Correlation Between DAEYANG ELECTRICCoLtd and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both DAEYANG ELECTRICCoLtd and Seoul Electronics 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 DAEYANG ELECTRICCoLtd and Seoul Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEYANG ELECTRICCoLtd and Seoul Electronics Telecom, you can compare the effects of market volatilities on DAEYANG ELECTRICCoLtd and Seoul Electronics 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 DAEYANG ELECTRICCoLtd with a short position of Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEYANG ELECTRICCoLtd and Seoul Electronics.
Diversification Opportunities for DAEYANG ELECTRICCoLtd and Seoul Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAEYANG and Seoul is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding DAEYANG ELECTRICCoLtd and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom and DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd are associated (or correlated) with Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of DAEYANG ELECTRICCoLtd i.e., DAEYANG ELECTRICCoLtd and Seoul Electronics go up and down completely randomly.
Pair Corralation between DAEYANG ELECTRICCoLtd and Seoul Electronics
Assuming the 90 days trading horizon DAEYANG ELECTRICCoLtd is expected to generate 0.82 times more return on investment than Seoul Electronics. However, DAEYANG ELECTRICCoLtd is 1.22 times less risky than Seoul Electronics. It trades about 0.01 of its potential returns per unit of risk. Seoul Electronics Telecom is currently generating about -0.06 per unit of risk. If you would invest 1,264,592 in DAEYANG ELECTRICCoLtd on August 30, 2024 and sell it today you would earn a total of 50,408 from holding DAEYANG ELECTRICCoLtd or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEYANG ELECTRICCoLtd vs. Seoul Electronics Telecom
Performance |
| Timeline |
| DAEYANG ELECTRICCoLtd |
| Seoul Electronics Telecom |
DAEYANG ELECTRICCoLtd and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEYANG ELECTRICCoLtd and Seoul Electronics
The main advantage of trading using opposite DAEYANG ELECTRICCoLtd and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEYANG ELECTRICCoLtd position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| DAEYANG ELECTRICCoLtd vs. Seoul Electronics Telecom | DAEYANG ELECTRICCoLtd vs. Hana Financial | DAEYANG ELECTRICCoLtd vs. Dongbu Insurance Co | DAEYANG ELECTRICCoLtd vs. InfoBank |
| Seoul Electronics vs. Samsung Electronics Co | Seoul Electronics vs. Samsung Electronics Co | Seoul Electronics vs. KB Financial Group | Seoul Electronics vs. Shinhan Financial Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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