Correlation Between Aprogen Healthcare and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Daejoo Electronic 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 Daejoo Electronic 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 Daejoo Electronic Materials, you can compare the effects of market volatilities on Aprogen Healthcare and Daejoo Electronic 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 Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Daejoo Electronic.
Diversification Opportunities for Aprogen Healthcare and Daejoo Electronic
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aprogen and Daejoo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic 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 Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Daejoo Electronic go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Daejoo Electronic
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to generate 1.36 times more return on investment than Daejoo Electronic. However, Aprogen Healthcare is 1.36 times more volatile than Daejoo Electronic Materials. It trades about -0.18 of its potential returns per unit of risk. Daejoo Electronic Materials is currently generating about -0.36 per unit of risk. If you would invest 55,400 in Aprogen Healthcare Games on September 3, 2024 and sell it today you would lose (9,600) from holding Aprogen Healthcare Games or give up 17.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Daejoo Electronic Materials
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Daejoo Electronic |
Aprogen Healthcare and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Daejoo Electronic
The main advantage of trading using opposite Aprogen Healthcare and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Daejoo Electronic 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic's long position.| Aprogen Healthcare vs. Display Tech Co | Aprogen Healthcare vs. Sam Yang Foods | Aprogen Healthcare vs. Organic Special Pet | Aprogen Healthcare vs. FoodNamoo |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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