Correlation Between Daewoo SBI and DAEYANG ELECTRICCoLtd
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and DAEYANG ELECTRICCoLtd 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 Daewoo SBI and DAEYANG ELECTRICCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and DAEYANG ELECTRICCoLtd, you can compare the effects of market volatilities on Daewoo SBI and DAEYANG ELECTRICCoLtd 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 Daewoo SBI with a short position of DAEYANG ELECTRICCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and DAEYANG ELECTRICCoLtd.
Diversification Opportunities for Daewoo SBI and DAEYANG ELECTRICCoLtd
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and DAEYANG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and DAEYANG ELECTRICCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEYANG ELECTRICCoLtd and Daewoo SBI 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 Daewoo SBI SPAC are associated (or correlated) with DAEYANG ELECTRICCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEYANG ELECTRICCoLtd has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and DAEYANG ELECTRICCoLtd go up and down completely randomly.
Pair Corralation between Daewoo SBI and DAEYANG ELECTRICCoLtd
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 1.24 times more return on investment than DAEYANG ELECTRICCoLtd. However, Daewoo SBI is 1.24 times more volatile than DAEYANG ELECTRICCoLtd. It trades about 0.18 of its potential returns per unit of risk. DAEYANG ELECTRICCoLtd is currently generating about -0.08 per unit of risk. If you would invest 255,500 in Daewoo SBI SPAC on September 12, 2024 and sell it today you would earn a total of 41,000 from holding Daewoo SBI SPAC or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. DAEYANG ELECTRICCoLtd
Performance |
| Timeline |
| Daewoo SBI SPAC |
| DAEYANG ELECTRICCoLtd |
Daewoo SBI and DAEYANG ELECTRICCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and DAEYANG ELECTRICCoLtd
The main advantage of trading using opposite Daewoo SBI and DAEYANG ELECTRICCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd will offset losses from the drop in DAEYANG ELECTRICCoLtd's long position.| Daewoo SBI vs. Coloray International Investment | Daewoo SBI vs. Mobile Appliance | Daewoo SBI vs. Sangsangin Investment Securities | Daewoo SBI vs. Samyung Trading Co |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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