Correlation Between DSC Investment and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Daesung Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Daesung Hi Tech Co, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Daesung Hi.
Diversification Opportunities for DSC Investment and Daesung Hi
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between DSC and Daesung is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment 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 DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Daesung Hi go up and down completely randomly.
Pair Corralation between DSC Investment and Daesung Hi
Assuming the 90 days trading horizon DSC Investment is expected to generate 0.5 times more return on investment than Daesung Hi. However, DSC Investment is 2.01 times less risky than Daesung Hi. It trades about -0.15 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.16 per unit of risk. If you would invest 294,439 in DSC Investment on October 20, 2024 and sell it today you would lose (7,939) from holding DSC Investment or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Daesung Hi Tech Co
Performance |
| Timeline |
| DSC Investment |
| Daesung Hi Tech |
DSC Investment and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Daesung Hi
The main advantage of trading using opposite DSC Investment and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. Iljin Display | DSC Investment vs. Worldex Industry Trading | DSC Investment vs. Digital Power Communications | DSC Investment vs. NH Investment Securities |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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