Correlation Between Chorokbaem Healthcare and Daou Technology
Can any of the company-specific risk be diversified away by investing in both Chorokbaem Healthcare and Daou Technology 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 Chorokbaem Healthcare and Daou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chorokbaem Healthcare Co and Daou Technology, you can compare the effects of market volatilities on Chorokbaem Healthcare and Daou Technology 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 Chorokbaem Healthcare with a short position of Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chorokbaem Healthcare and Daou Technology.
Diversification Opportunities for Chorokbaem Healthcare and Daou Technology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chorokbaem and Daou is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chorokbaem Healthcare Co and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology and Chorokbaem 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 Chorokbaem Healthcare Co are associated (or correlated) with Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of Chorokbaem Healthcare i.e., Chorokbaem Healthcare and Daou Technology go up and down completely randomly.
Pair Corralation between Chorokbaem Healthcare and Daou Technology
Assuming the 90 days trading horizon Chorokbaem Healthcare Co is expected to under-perform the Daou Technology. In addition to that, Chorokbaem Healthcare is 1.65 times more volatile than Daou Technology. It trades about -0.2 of its total potential returns per unit of risk. Daou Technology is currently generating about -0.05 per unit of volatility. If you would invest 1,849,000 in Daou Technology on September 29, 2024 and sell it today you would lose (71,000) from holding Daou Technology or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chorokbaem Healthcare Co vs. Daou Technology
Performance |
| Timeline |
| Chorokbaem Healthcare |
| Daou Technology |
Chorokbaem Healthcare and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chorokbaem Healthcare and Daou Technology
The main advantage of trading using opposite Chorokbaem Healthcare and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chorokbaem Healthcare position performs unexpectedly, Daou Technology 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 Daou Technology will offset losses from the drop in Daou Technology's long position.The idea behind Chorokbaem Healthcare Co and Daou Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Daou Technology vs. Narae Nanotech Corp | Daou Technology vs. THiRA UTECH LTD | Daou Technology vs. Daejung Chemicals Metals | Daou Technology vs. Chorokbaem Healthcare Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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