Correlation Between Daesung Hi-Tech and Daesung Private
Can any of the company-specific risk be diversified away by investing in both Daesung Hi-Tech and Daesung Private 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-Tech and Daesung Private 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 Daesung Private Equity, you can compare the effects of market volatilities on Daesung Hi-Tech and Daesung Private 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-Tech with a short position of Daesung Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi-Tech and Daesung Private.
Diversification Opportunities for Daesung Hi-Tech and Daesung Private
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daesung and Daesung is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Daesung Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Private Equity and Daesung Hi-Tech 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 Daesung Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Private Equity has no effect on the direction of Daesung Hi-Tech i.e., Daesung Hi-Tech and Daesung Private go up and down completely randomly.
Pair Corralation between Daesung Hi-Tech and Daesung Private
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to under-perform the Daesung Private. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Hi Tech Co is 1.44 times less risky than Daesung Private. The stock trades about -0.07 of its potential returns per unit of risk. The Daesung Private Equity is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 225,000 in Daesung Private Equity on September 14, 2024 and sell it today you would lose (41,800) from holding Daesung Private Equity or give up 18.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. Daesung Private Equity
Performance |
| Timeline |
| Daesung Hi Tech |
| Daesung Private Equity |
Daesung Hi-Tech and Daesung Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi-Tech and Daesung Private
The main advantage of trading using opposite Daesung Hi-Tech and Daesung Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi-Tech position performs unexpectedly, Daesung Private 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 Daesung Private will offset losses from the drop in Daesung Private's long position.| Daesung Hi-Tech vs. Dongwoo Farm To | Daesung Hi-Tech vs. Keyang Electric Machinery | Daesung Hi-Tech vs. Shinsegae Engineering Construction | Daesung Hi-Tech vs. BIT Computer Co |
| Daesung Private vs. KB Financial Group | Daesung Private vs. Shinhan Financial Group | Daesung Private vs. Hana Financial | Daesung Private vs. Woori Financial Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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