Correlation Between Cuckoo Electronics and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics and Daesung Hi 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 Cuckoo Electronics and Daesung Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and Daesung Hi Tech Co, you can compare the effects of market volatilities on Cuckoo Electronics and Daesung Hi 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 Cuckoo Electronics with a short position of Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Daesung Hi.
Diversification Opportunities for Cuckoo Electronics and Daesung Hi
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cuckoo and Daesung is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech and Cuckoo Electronics 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 Cuckoo Electronics Co are associated (or correlated) with Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Cuckoo Electronics i.e., Cuckoo Electronics and Daesung Hi go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Daesung Hi
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to under-perform the Daesung Hi. But the stock apears to be less risky and, when comparing its historical volatility, Cuckoo Electronics Co is 2.25 times less risky than Daesung Hi. The stock trades about -0.21 of its potential returns per unit of risk. The Daesung Hi Tech Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 297,500 in Daesung Hi Tech Co on November 27, 2024 and sell it today you would earn a total of 24,500 from holding Daesung Hi Tech Co or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Daesung Hi Tech Co
Performance |
| Timeline |
| Cuckoo Electronics |
| Daesung Hi Tech |
Cuckoo Electronics and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Daesung Hi
The main advantage of trading using opposite Cuckoo Electronics and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics position performs unexpectedly, Daesung Hi 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 Hi will offset losses from the drop in Daesung Hi's long position.| Cuckoo Electronics vs. LB Investment | Cuckoo Electronics vs. KTB Investment Securities | Cuckoo Electronics vs. Sangsangin Investment Securities | Cuckoo Electronics vs. SV Investment |
| Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. LG Energy Solution | Daesung Hi vs. SK Hynix |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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