Correlation Between DeviceENGCOLtd and Global Standard
Can any of the company-specific risk be diversified away by investing in both DeviceENGCOLtd and Global Standard 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 DeviceENGCOLtd and Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeviceENGCOLtd and Global Standard Technology, you can compare the effects of market volatilities on DeviceENGCOLtd and Global Standard 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 DeviceENGCOLtd with a short position of Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeviceENGCOLtd and Global Standard.
Diversification Opportunities for DeviceENGCOLtd and Global Standard
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DeviceENGCOLtd and Global is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DeviceENGCOLtd and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech and DeviceENGCOLtd 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 DeviceENGCOLtd are associated (or correlated) with Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of DeviceENGCOLtd i.e., DeviceENGCOLtd and Global Standard go up and down completely randomly.
Pair Corralation between DeviceENGCOLtd and Global Standard
Assuming the 90 days trading horizon DeviceENGCOLtd is expected to generate 4.93 times less return on investment than Global Standard. But when comparing it to its historical volatility, DeviceENGCOLtd is 1.79 times less risky than Global Standard. It trades about 0.13 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,674,000 in Global Standard Technology on October 29, 2024 and sell it today you would earn a total of 275,000 from holding Global Standard Technology or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeviceENGCOLtd vs. Global Standard Technology
Performance |
| Timeline |
| DeviceENGCOLtd |
| Global Standard Tech |
DeviceENGCOLtd and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeviceENGCOLtd and Global Standard
The main advantage of trading using opposite DeviceENGCOLtd and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeviceENGCOLtd position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| DeviceENGCOLtd vs. Fine Besteel Co | DeviceENGCOLtd vs. Cuckoo Electronics Co | DeviceENGCOLtd vs. SeAH Besteel Corp | DeviceENGCOLtd vs. Korea Electronic Certification |
| Global Standard vs. KMH Hitech Co | Global Standard vs. BGF Retail Co | Global Standard vs. Vitzro Tech Co | Global Standard vs. Korean Drug 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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