Correlation Between Aprogen Healthcare and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Daedong Metals 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 Aprogen Healthcare and Daedong Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and Daedong Metals Co, you can compare the effects of market volatilities on Aprogen Healthcare and Daedong Metals 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 Aprogen Healthcare with a short position of Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Daedong Metals.
Diversification Opportunities for Aprogen Healthcare and Daedong Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aprogen and Daedong is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Daedong Metals go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Daedong Metals
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Daedong Metals. But the stock apears to be less risky and, when comparing its historical volatility, Aprogen Healthcare Games is 1.95 times less risky than Daedong Metals. The stock trades about -0.02 of its potential returns per unit of risk. The Daedong Metals Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 669,000 in Daedong Metals Co on August 28, 2024 and sell it today you would earn a total of 65,000 from holding Daedong Metals Co or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Daedong Metals Co
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Daedong Metals |
Aprogen Healthcare and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Daedong Metals
The main advantage of trading using opposite Aprogen Healthcare and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Aprogen Healthcare vs. Korea Real Estate | Aprogen Healthcare vs. Korea Ratings Co | Aprogen Healthcare vs. IQuest Co | Aprogen Healthcare vs. Wonbang Tech Co |
| Daedong Metals vs. Cuckoo Electronics Co | Daedong Metals vs. Derkwoo Electronics Co | Daedong Metals vs. LG Electronics | Daedong Metals vs. Seoul Electronics Telecom |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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