Correlation Between Korea Computer and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Daishin Information 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 Korea Computer and Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer Systems and Daishin Information Communications, you can compare the effects of market volatilities on Korea Computer and Daishin Information 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 Korea Computer with a short position of Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Daishin Information.
Diversification Opportunities for Korea Computer and Daishin Information
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Daishin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer Systems and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information and Korea Computer 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 Korea Computer Systems are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Korea Computer i.e., Korea Computer and Daishin Information go up and down completely randomly.
Pair Corralation between Korea Computer and Daishin Information
Assuming the 90 days trading horizon Korea Computer Systems is expected to generate 2.11 times more return on investment than Daishin Information. However, Korea Computer is 2.11 times more volatile than Daishin Information Communications. It trades about 0.09 of its potential returns per unit of risk. Daishin Information Communications is currently generating about 0.0 per unit of risk. If you would invest 658,548 in Korea Computer Systems on October 25, 2024 and sell it today you would earn a total of 539,452 from holding Korea Computer Systems or generate 81.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer Systems vs. Daishin Information Communicat
Performance |
| Timeline |
| Korea Computer Systems |
| Daishin Information |
Korea Computer and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Daishin Information
The main advantage of trading using opposite Korea Computer and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Korea Computer vs. Daehan Steel | Korea Computer vs. Digital Power Communications | Korea Computer vs. Sewoon Medical Co | Korea Computer vs. Finebesteel |
| Daishin Information vs. Settlebank | Daishin Information vs. SSR Inc | Daishin Information vs. Busan Industrial Co | Daishin Information vs. Busan Ind |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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