Correlation Between Daesung Industrial and Automobile
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Daesung Industrial and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and Automobile.
Diversification Opportunities for Daesung Industrial and Automobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daesung and Automobile is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and Automobile go up and down completely randomly.
Pair Corralation between Daesung Industrial and Automobile
Assuming the 90 days trading horizon Daesung Industrial Co is expected to generate 1.0 times more return on investment than Automobile. However, Daesung Industrial Co is 1.0 times less risky than Automobile. It trades about -0.01 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.18 per unit of risk. If you would invest 330,000 in Daesung Industrial Co on October 30, 2024 and sell it today you would lose (7,500) from holding Daesung Industrial Co or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Industrial Co vs. Automobile Pc
Performance |
| Timeline |
| Daesung Industrial |
| Automobile Pc |
Daesung Industrial and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and Automobile
The main advantage of trading using opposite Daesung Industrial and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Daesung Industrial vs. Shinhan Inverse Copper | Daesung Industrial vs. Miwon Chemicals Co | Daesung Industrial vs. Formetal Co | Daesung Industrial vs. LB Investment |
| Automobile vs. Hana Materials | Automobile vs. Hyosung Advanced Materials | Automobile vs. INNOX Advanced Materials | Automobile 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |