Correlation Between EV Advanced and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both EV Advanced and Daejoo Electronic 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 EV Advanced and Daejoo Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and Daejoo Electronic Materials, you can compare the effects of market volatilities on EV Advanced and Daejoo Electronic 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 EV Advanced with a short position of Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and Daejoo Electronic.
Diversification Opportunities for EV Advanced and Daejoo Electronic
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 131400 and Daejoo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic and EV Advanced 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 EV Advanced Material are associated (or correlated) with Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of EV Advanced i.e., EV Advanced and Daejoo Electronic go up and down completely randomly.
Pair Corralation between EV Advanced and Daejoo Electronic
Assuming the 90 days trading horizon EV Advanced Material is expected to under-perform the Daejoo Electronic. In addition to that, EV Advanced is 1.24 times more volatile than Daejoo Electronic Materials. It trades about -0.04 of its total potential returns per unit of risk. Daejoo Electronic Materials is currently generating about 0.01 per unit of volatility. If you would invest 9,638,512 in Daejoo Electronic Materials on August 29, 2024 and sell it today you would lose (798,512) from holding Daejoo Electronic Materials or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EV Advanced Material vs. Daejoo Electronic Materials
Performance |
| Timeline |
| EV Advanced Material |
| Daejoo Electronic |
EV Advanced and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and Daejoo Electronic
The main advantage of trading using opposite EV Advanced and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced position performs unexpectedly, Daejoo Electronic 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic's long position.| EV Advanced vs. Korea Real Estate | EV Advanced vs. Korea Ratings Co | EV Advanced vs. IQuest Co | EV Advanced vs. Wonbang Tech Co |
| Daejoo Electronic vs. Korea Real Estate | Daejoo Electronic vs. Korea Ratings Co | Daejoo Electronic vs. IQuest Co | Daejoo Electronic vs. Wonbang 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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