Correlation Between Daesung Industrial and Display Tech
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and Display Tech 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 Display Tech 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 Display Tech Co, you can compare the effects of market volatilities on Daesung Industrial and Display Tech 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 Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and Display Tech.
Diversification Opportunities for Daesung Industrial and Display Tech
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daesung and Display is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech 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 Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and Display Tech go up and down completely randomly.
Pair Corralation between Daesung Industrial and Display Tech
Assuming the 90 days trading horizon Daesung Industrial Co is expected to generate 0.75 times more return on investment than Display Tech. However, Daesung Industrial Co is 1.33 times less risky than Display Tech. It trades about -0.01 of its potential returns per unit of risk. Display Tech Co is currently generating about -0.01 per unit of risk. If you would invest 417,000 in Daesung Industrial Co on October 14, 2024 and sell it today you would lose (88,000) from holding Daesung Industrial Co or give up 21.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.83% |
| Values | Daily Returns |
Daesung Industrial Co vs. Display Tech Co
Performance |
| Timeline |
| Daesung Industrial |
| Display Tech |
Daesung Industrial and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and Display Tech
The main advantage of trading using opposite Daesung Industrial and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's long position.| Daesung Industrial vs. AptaBio Therapeutics | Daesung Industrial vs. Daewoo SBI SPAC | Daesung Industrial vs. Dream Security co | Daesung Industrial vs. Microfriend |
| Display Tech vs. PJ Metal Co | Display Tech vs. Daiyang Metal Co | Display Tech vs. DONGKUK TED METAL | Display Tech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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