Correlation Between Daesung Hi and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and Daiyang Metal 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 Daiyang Metal 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 Daiyang Metal Co, you can compare the effects of market volatilities on Daesung Hi and Daiyang Metal 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 Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and Daiyang Metal.
Diversification Opportunities for Daesung Hi and Daiyang Metal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daesung and Daiyang is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal 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 Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of Daesung Hi i.e., Daesung Hi and Daiyang Metal go up and down completely randomly.
Pair Corralation between Daesung Hi and Daiyang Metal
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to under-perform the Daiyang Metal. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Hi Tech Co is 1.52 times less risky than Daiyang Metal. The stock trades about -0.19 of its potential returns per unit of risk. The Daiyang Metal Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 169,000 in Daiyang Metal Co on October 16, 2024 and sell it today you would lose (8,900) from holding Daiyang Metal Co or give up 5.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. Daiyang Metal Co
Performance |
| Timeline |
| Daesung Hi Tech |
| Daiyang Metal |
Daesung Hi and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and Daiyang Metal
The main advantage of trading using opposite Daesung Hi and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| Daesung Hi vs. Dongbang Transport Logistics | Daesung Hi vs. Samick Musical Instruments | Daesung Hi vs. Hanjin Transportation Co | Daesung Hi vs. PJ Metal Co |
| Daiyang Metal vs. Youngsin Metal Industrial | Daiyang Metal vs. Dongil Metal Co | Daiyang Metal vs. Display Tech Co | Daiyang Metal vs. Daesung Hi Tech 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |