Correlation Between Daesung Industrial and GS Retail
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and GS Retail 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 Daesung Industrial and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Industrial Co and GS Retail Co, you can compare the effects of market volatilities on Daesung Industrial and GS Retail 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 Daesung Industrial with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and GS Retail.
Diversification Opportunities for Daesung Industrial and GS Retail
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daesung and 007070 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Daesung Industrial 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 Daesung Industrial Co are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and GS Retail go up and down completely randomly.
Pair Corralation between Daesung Industrial and GS Retail
Assuming the 90 days trading horizon Daesung Industrial Co is expected to generate 0.89 times more return on investment than GS Retail. However, Daesung Industrial Co is 1.12 times less risky than GS Retail. It trades about -0.03 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.18 per unit of risk. If you would invest 344,500 in Daesung Industrial Co on October 29, 2024 and sell it today you would lose (22,000) from holding Daesung Industrial Co or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.58% |
| Values | Daily Returns |
Daesung Industrial Co vs. GS Retail Co
Performance |
| Timeline |
| Daesung Industrial |
| GS Retail |
Daesung Industrial and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and GS Retail
The main advantage of trading using opposite Daesung Industrial and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Daesung Industrial vs. KB Financial Group | Daesung Industrial vs. Shinhan Financial Group | Daesung Industrial vs. Hana Financial | Daesung Industrial vs. Woori Financial Group |
| GS Retail vs. KB Financial Group | GS Retail vs. Shinhan Financial Group | GS Retail vs. Hana Financial | GS Retail vs. Woori Financial Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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