Correlation Between Daesung Hi and Genolution
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and Genolution 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 Genolution 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 Genolution, you can compare the effects of market volatilities on Daesung Hi and Genolution 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 Genolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and Genolution.
Diversification Opportunities for Daesung Hi and Genolution
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daesung and Genolution is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and Genolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genolution 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 Genolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genolution has no effect on the direction of Daesung Hi i.e., Daesung Hi and Genolution go up and down completely randomly.
Pair Corralation between Daesung Hi and Genolution
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to generate 0.64 times more return on investment than Genolution. However, Daesung Hi Tech Co is 1.57 times less risky than Genolution. It trades about -0.26 of its potential returns per unit of risk. Genolution is currently generating about -0.42 per unit of risk. If you would invest 403,000 in Daesung Hi Tech Co on September 1, 2024 and sell it today you would lose (34,500) from holding Daesung Hi Tech Co or give up 8.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daesung Hi Tech Co vs. Genolution
Performance |
| Timeline |
| Daesung Hi Tech |
| Genolution |
Daesung Hi and Genolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Hi and Genolution
The main advantage of trading using opposite Daesung Hi and Genolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, Genolution 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 Genolution will offset losses from the drop in Genolution'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 |
| Genolution vs. Duksan Hi Metal | Genolution vs. Shinsegae Information Communication | Genolution vs. Daesung Hi Tech Co | Genolution vs. Kukil Metal 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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