Correlation Between Amogreentech and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both Amogreentech 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 Amogreentech and Daejoo Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amogreentech Co and Daejoo Electronic Materials, you can compare the effects of market volatilities on Amogreentech 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 Amogreentech with a short position of Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and Daejoo Electronic.
Diversification Opportunities for Amogreentech and Daejoo Electronic
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amogreentech and Daejoo is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic and Amogreentech 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 Amogreentech Co 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 Amogreentech i.e., Amogreentech and Daejoo Electronic go up and down completely randomly.
Pair Corralation between Amogreentech and Daejoo Electronic
Assuming the 90 days trading horizon Amogreentech Co is expected to generate 1.1 times more return on investment than Daejoo Electronic. However, Amogreentech is 1.1 times more volatile than Daejoo Electronic Materials. It trades about -0.06 of its potential returns per unit of risk. Daejoo Electronic Materials is currently generating about -0.26 per unit of risk. If you would invest 709,000 in Amogreentech Co on August 29, 2024 and sell it today you would lose (42,000) from holding Amogreentech Co or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amogreentech Co vs. Daejoo Electronic Materials
Performance |
| Timeline |
| Amogreentech |
| Daejoo Electronic |
Amogreentech and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amogreentech and Daejoo Electronic
The main advantage of trading using opposite Amogreentech and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech 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.The idea behind Amogreentech Co and Daejoo Electronic Materials 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.| Daejoo Electronic vs. Korea Real Estate | Daejoo Electronic vs. Korea Ratings Co | Daejoo Electronic vs. IQuest Co | Daejoo Electronic vs. Wonbang Tech 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |