Correlation Between Daesung Hi and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and Mgame Corp 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 Mgame Corp 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 Mgame Corp, you can compare the effects of market volatilities on Daesung Hi and Mgame Corp 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and Mgame Corp.
Diversification Opportunities for Daesung Hi and Mgame Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daesung and Mgame is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Daesung Hi i.e., Daesung Hi and Mgame Corp go up and down completely randomly.
Pair Corralation between Daesung Hi and Mgame Corp
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to under-perform the Mgame Corp. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Hi Tech Co is 1.91 times less risky than Mgame Corp. The stock trades about -0.26 of its potential returns per unit of risk. The Mgame Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 643,000 in Mgame Corp on August 31, 2024 and sell it today you would lose (98,000) from holding Mgame Corp or give up 15.24% 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. Mgame Corp
Performance |
| Timeline |
| Daesung Hi Tech |
| Mgame Corp |
Daesung Hi and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and Mgame Corp
The main advantage of trading using opposite Daesung Hi and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's 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 |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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