Correlation Between Microfriend and Daesung Industrial
Can any of the company-specific risk be diversified away by investing in both Microfriend and Daesung Industrial 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 Microfriend and Daesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Daesung Industrial Co, you can compare the effects of market volatilities on Microfriend and Daesung Industrial 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 Microfriend with a short position of Daesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Daesung Industrial.
Diversification Opportunities for Microfriend and Daesung Industrial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microfriend and Daesung is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Daesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Industrial and Microfriend 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 Microfriend are associated (or correlated) with Daesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Industrial has no effect on the direction of Microfriend i.e., Microfriend and Daesung Industrial go up and down completely randomly.
Pair Corralation between Microfriend and Daesung Industrial
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Daesung Industrial. In addition to that, Microfriend is 1.45 times more volatile than Daesung Industrial Co. It trades about -0.01 of its total potential returns per unit of risk. Daesung Industrial Co is currently generating about -0.01 per unit of volatility. If you would invest 417,000 in Daesung Industrial Co on October 12, 2024 and sell it today you would lose (88,000) from holding Daesung Industrial Co or give up 21.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Daesung Industrial Co
Performance |
| Timeline |
| Microfriend |
| Daesung Industrial |
Microfriend and Daesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Daesung Industrial
The main advantage of trading using opposite Microfriend and Daesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Daesung Industrial 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 Daesung Industrial will offset losses from the drop in Daesung Industrial's long position.| Microfriend vs. GS Retail Co | Microfriend vs. InnoTherapy | Microfriend vs. Aprogen Healthcare Games | Microfriend vs. Lotte Non Life Insurance |
| Daesung Industrial vs. AptaBio Therapeutics | Daesung Industrial vs. Daewoo SBI SPAC | Daesung Industrial vs. Dream Security co | Daesung Industrial vs. Microfriend |
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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