Correlation Between Digital Imaging and KG Eco
Can any of the company-specific risk be diversified away by investing in both Digital Imaging and KG Eco 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 Digital Imaging and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Imaging Technology and KG Eco Technology, you can compare the effects of market volatilities on Digital Imaging and KG Eco 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 Digital Imaging with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Imaging and KG Eco.
Diversification Opportunities for Digital Imaging and KG Eco
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and 151860 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Digital Imaging Technology and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and Digital Imaging 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 Digital Imaging Technology are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Digital Imaging i.e., Digital Imaging and KG Eco go up and down completely randomly.
Pair Corralation between Digital Imaging and KG Eco
Assuming the 90 days trading horizon Digital Imaging Technology is expected to generate 1.27 times more return on investment than KG Eco. However, Digital Imaging is 1.27 times more volatile than KG Eco Technology. It trades about 0.06 of its potential returns per unit of risk. KG Eco Technology is currently generating about -0.02 per unit of risk. If you would invest 516,813 in Digital Imaging Technology on September 14, 2024 and sell it today you would earn a total of 658,187 from holding Digital Imaging Technology or generate 127.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Digital Imaging Technology vs. KG Eco Technology
Performance |
| Timeline |
| Digital Imaging Tech |
| KG Eco Technology |
Digital Imaging and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Imaging and KG Eco
The main advantage of trading using opposite Digital Imaging and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Imaging position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| Digital Imaging vs. SK Hynix | Digital Imaging vs. People Technology | Digital Imaging vs. Hana Materials | Digital Imaging vs. SIMMTECH Co |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco vs. SK Hynix |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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