Correlation Between Daesung Hi and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and KyungIn 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 Hi and KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Hi Tech Co and KyungIn Electronics Co, you can compare the effects of market volatilities on Daesung Hi and KyungIn 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 Hi with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and KyungIn Electronics.
Diversification Opportunities for Daesung Hi and KyungIn Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daesung and KyungIn is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Daesung Hi 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 Hi Tech Co are associated (or correlated) with KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Daesung Hi i.e., Daesung Hi and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Daesung Hi and KyungIn Electronics
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to generate 1.57 times more return on investment than KyungIn Electronics. However, Daesung Hi is 1.57 times more volatile than KyungIn Electronics Co. It trades about 0.3 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 297,500 in Daesung Hi Tech Co on November 27, 2024 and sell it today you would earn a total of 24,500 from holding Daesung Hi Tech Co or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. KyungIn Electronics Co
Performance |
| Timeline |
| Daesung Hi Tech |
| KyungIn Electronics |
Daesung Hi and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and KyungIn Electronics
The main advantage of trading using opposite Daesung Hi and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, KyungIn 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. LG Energy Solution | Daesung Hi vs. SK Hynix |
| KyungIn Electronics vs. Innowireless Co | KyungIn Electronics vs. ITM Semiconductor Co | KyungIn Electronics vs. Mgame Corp | KyungIn Electronics vs. Daishin Information Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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