Correlation Between Green Cross and Daejoo
Can any of the company-specific risk be diversified away by investing in both Green Cross and Daejoo 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 Green Cross and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Daejoo Inc, you can compare the effects of market volatilities on Green Cross and Daejoo 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 Green Cross with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Daejoo.
Diversification Opportunities for Green Cross and Daejoo
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Daejoo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and Green Cross 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 Green Cross Medical are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of Green Cross i.e., Green Cross and Daejoo go up and down completely randomly.
Pair Corralation between Green Cross and Daejoo
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 4.72 times more return on investment than Daejoo. However, Green Cross is 4.72 times more volatile than Daejoo Inc. It trades about 0.09 of its potential returns per unit of risk. Daejoo Inc is currently generating about 0.09 per unit of risk. If you would invest 368,500 in Green Cross Medical on October 22, 2024 and sell it today you would earn a total of 24,500 from holding Green Cross Medical or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Green Cross Medical vs. Daejoo Inc
Performance |
| Timeline |
| Green Cross Medical |
| Daejoo Inc |
Green Cross and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Daejoo
The main advantage of trading using opposite Green Cross and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Daejoo 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 will offset losses from the drop in Daejoo's long position.| Green Cross vs. Stic Investments | Green Cross vs. Koryo Credit Information | Green Cross vs. Woori Financial Group | Green Cross vs. E Investment Development |
| Daejoo vs. Lake Materials Co | Daejoo vs. National Plastic Co | Daejoo vs. Choil Aluminum | Daejoo vs. Green Cross Medical |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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