Correlation Between Daesung Industrial and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and Daeduck Electronics 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 Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on Daesung Industrial and Daeduck Electronics 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and Daeduck Electronics.
Diversification Opportunities for Daesung Industrial and Daeduck Electronics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daesung and Daeduck is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and Daeduck Electronics go up and down completely randomly.
Pair Corralation between Daesung Industrial and Daeduck Electronics
Assuming the 90 days trading horizon Daesung Industrial Co is expected to under-perform the Daeduck Electronics. In addition to that, Daesung Industrial is 1.8 times more volatile than Daeduck Electronics Co. It trades about -0.19 of its total potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.18 per unit of volatility. If you would invest 663,000 in Daeduck Electronics Co on October 14, 2024 and sell it today you would earn a total of 16,000 from holding Daeduck Electronics Co or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Industrial Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| Daesung Industrial |
| Daeduck Electronics |
Daesung Industrial and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and Daeduck Electronics
The main advantage of trading using opposite Daesung Industrial and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| Daesung Industrial vs. AptaBio Therapeutics | Daesung Industrial vs. Daewoo SBI SPAC | Daesung Industrial vs. Dream Security co | Daesung Industrial vs. Microfriend |
| Daeduck Electronics vs. PJ Metal Co | Daeduck Electronics vs. Hanjoo Light Metal | Daeduck Electronics vs. Hyunwoo Industrial Co | Daeduck Electronics vs. Daesung Industrial 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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