Correlation Between Daishin Balance and Interflex
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Interflex 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 Daishin Balance and Interflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance 1 and Interflex Co, you can compare the effects of market volatilities on Daishin Balance and Interflex 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 Daishin Balance with a short position of Interflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Interflex.
Diversification Opportunities for Daishin Balance and Interflex
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Interflex is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 and Interflex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interflex and Daishin Balance 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 Daishin Balance 1 are associated (or correlated) with Interflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interflex has no effect on the direction of Daishin Balance i.e., Daishin Balance and Interflex go up and down completely randomly.
Pair Corralation between Daishin Balance and Interflex
Assuming the 90 days trading horizon Daishin Balance 1 is expected to generate 1.66 times more return on investment than Interflex. However, Daishin Balance is 1.66 times more volatile than Interflex Co. It trades about 0.11 of its potential returns per unit of risk. Interflex Co is currently generating about -0.35 per unit of risk. If you would invest 512,000 in Daishin Balance 1 on September 4, 2024 and sell it today you would earn a total of 36,000 from holding Daishin Balance 1 or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance 1 vs. Interflex Co
Performance |
| Timeline |
| Daishin Balance 1 |
| Interflex |
Daishin Balance and Interflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Interflex
The main advantage of trading using opposite Daishin Balance and Interflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Interflex 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 Interflex will offset losses from the drop in Interflex's long position.| Daishin Balance vs. Korea New Network | Daishin Balance vs. ICD Co | Daishin Balance vs. DYPNF CoLtd | Daishin Balance vs. Busan Industrial Co |
| Interflex vs. Dongsin Engineering Construction | Interflex vs. Doosan Fuel Cell | Interflex vs. Daishin Balance 1 | Interflex vs. Total Soft Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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