Correlation Between Incar Financial and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Incar Financial and DSC Investment 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 Incar Financial and DSC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and DSC Investment, you can compare the effects of market volatilities on Incar Financial and DSC Investment 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 Incar Financial with a short position of DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and DSC Investment.
Diversification Opportunities for Incar Financial and DSC Investment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Incar and DSC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment and Incar Financial 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 Incar Financial Service are associated (or correlated) with DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Incar Financial i.e., Incar Financial and DSC Investment go up and down completely randomly.
Pair Corralation between Incar Financial and DSC Investment
Assuming the 90 days trading horizon Incar Financial Service is expected to under-perform the DSC Investment. In addition to that, Incar Financial is 1.94 times more volatile than DSC Investment. It trades about -0.31 of its total potential returns per unit of risk. DSC Investment is currently generating about -0.05 per unit of volatility. If you would invest 297,891 in DSC Investment on October 12, 2024 and sell it today you would lose (3,891) from holding DSC Investment or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. DSC Investment
Performance |
| Timeline |
| Incar Financial Service |
| DSC Investment |
Incar Financial and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and DSC Investment
The main advantage of trading using opposite Incar Financial and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| Incar Financial vs. Nice Information Telecommunication | Incar Financial vs. Shinsegae Food | Incar Financial vs. Sungchang Autotech Co | Incar Financial vs. Samlip General Foods |
| DSC Investment vs. Daol Investment Securities | DSC Investment vs. Golden Bridge Investment | DSC Investment vs. Korea Investment Holdings | DSC Investment vs. Incar Financial Service |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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