Correlation Between Daesung Hi and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and Jahwa Electron 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 Jahwa Electron 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 Jahwa Electron, you can compare the effects of market volatilities on Daesung Hi and Jahwa Electron 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 Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and Jahwa Electron.
Diversification Opportunities for Daesung Hi and Jahwa Electron
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daesung and Jahwa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron 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 Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Daesung Hi i.e., Daesung Hi and Jahwa Electron go up and down completely randomly.
Pair Corralation between Daesung Hi and Jahwa Electron
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to generate 0.74 times more return on investment than Jahwa Electron. However, Daesung Hi Tech Co is 1.35 times less risky than Jahwa Electron. It trades about -0.17 of its potential returns per unit of risk. Jahwa Electron is currently generating about -0.15 per unit of risk. If you would invest 446,500 in Daesung Hi Tech Co on October 14, 2024 and sell it today you would lose (107,000) from holding Daesung Hi Tech Co or give up 23.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. Jahwa Electron
Performance |
| Timeline |
| Daesung Hi Tech |
| Jahwa Electron |
Daesung Hi and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and Jahwa Electron
The main advantage of trading using opposite Daesung Hi and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's long position.| Daesung Hi vs. Hanjin Transportation Co | Daesung Hi vs. Daejung Chemicals Metals | Daesung Hi vs. Lotte Data Communication | Daesung Hi vs. Korea Computer |
| Jahwa Electron vs. Daishin Information Communications | Jahwa Electron vs. Inzi Display CoLtd | Jahwa Electron vs. Daesung Hi Tech Co | Jahwa Electron vs. Nable 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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