Correlation Between EyeGene and Daewon Media
Can any of the company-specific risk be diversified away by investing in both EyeGene and Daewon Media 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 EyeGene and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EyeGene and Daewon Media Co, you can compare the effects of market volatilities on EyeGene and Daewon Media 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 EyeGene with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of EyeGene and Daewon Media.
Diversification Opportunities for EyeGene and Daewon Media
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between EyeGene and Daewon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding EyeGene and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and EyeGene 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 EyeGene are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of EyeGene i.e., EyeGene and Daewon Media go up and down completely randomly.
Pair Corralation between EyeGene and Daewon Media
Assuming the 90 days trading horizon EyeGene is expected to under-perform the Daewon Media. But the stock apears to be less risky and, when comparing its historical volatility, EyeGene is 1.76 times less risky than Daewon Media. The stock trades about -0.09 of its potential returns per unit of risk. The Daewon Media Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 765,909 in Daewon Media Co on October 20, 2024 and sell it today you would earn a total of 81,091 from holding Daewon Media Co or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EyeGene vs. Daewon Media Co
Performance |
| Timeline |
| EyeGene |
| Daewon Media |
EyeGene and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EyeGene and Daewon Media
The main advantage of trading using opposite EyeGene and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EyeGene position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| EyeGene vs. LG Chemicals | EyeGene vs. Daejoo Electronic Materials | EyeGene vs. Samyoung Electronics Co | EyeGene vs. Hansol Homedeco Co |
| Daewon Media vs. Han Kook Steel | Daewon Media vs. Daehan Steel | Daewon Media vs. LG Household Healthcare | Daewon Media vs. Husteel |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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