Correlation Between Daishin Balance and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Korea Computer 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 Korea Computer 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 Korea Computer, you can compare the effects of market volatilities on Daishin Balance and Korea Computer 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 Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Korea Computer.
Diversification Opportunities for Daishin Balance and Korea Computer
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daishin and Korea is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer 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 Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Daishin Balance i.e., Daishin Balance and Korea Computer go up and down completely randomly.
Pair Corralation between Daishin Balance and Korea Computer
Assuming the 90 days trading horizon Daishin Balance 1 is expected to generate 2.18 times more return on investment than Korea Computer. However, Daishin Balance is 2.18 times more volatile than Korea Computer. It trades about 0.47 of its potential returns per unit of risk. Korea Computer is currently generating about -0.16 per unit of risk. If you would invest 566,000 in Daishin Balance 1 on November 29, 2024 and sell it today you would earn a total of 144,000 from holding Daishin Balance 1 or generate 25.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance 1 vs. Korea Computer
Performance |
| Timeline |
| Daishin Balance 1 |
| Korea Computer |
Daishin Balance and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Korea Computer
The main advantage of trading using opposite Daishin Balance and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer's long position.| Daishin Balance vs. Digital Power Communications | Daishin Balance vs. SK Telecom Co | Daishin Balance vs. Jin Air Co | Daishin Balance vs. GAMEVIL |
| Korea Computer vs. Homecast CoLtd | Korea Computer vs. Samlip General Foods | Korea Computer vs. FOODWELL Co | Korea Computer vs. Sangsin Energy Display |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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