Correlation Between Derkwoo Electronics and Mobileleader CoLtd
Can any of the company-specific risk be diversified away by investing in both Derkwoo Electronics and Mobileleader CoLtd 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 Derkwoo Electronics and Mobileleader CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derkwoo Electronics Co and Mobileleader CoLtd, you can compare the effects of market volatilities on Derkwoo Electronics and Mobileleader CoLtd 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 Derkwoo Electronics with a short position of Mobileleader CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derkwoo Electronics and Mobileleader CoLtd.
Diversification Opportunities for Derkwoo Electronics and Mobileleader CoLtd
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Derkwoo and Mobileleader is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Derkwoo Electronics Co and Mobileleader CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobileleader CoLtd and Derkwoo Electronics 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 Derkwoo Electronics Co are associated (or correlated) with Mobileleader CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobileleader CoLtd has no effect on the direction of Derkwoo Electronics i.e., Derkwoo Electronics and Mobileleader CoLtd go up and down completely randomly.
Pair Corralation between Derkwoo Electronics and Mobileleader CoLtd
Assuming the 90 days trading horizon Derkwoo Electronics Co is expected to under-perform the Mobileleader CoLtd. In addition to that, Derkwoo Electronics is 1.25 times more volatile than Mobileleader CoLtd. It trades about -0.1 of its total potential returns per unit of risk. Mobileleader CoLtd is currently generating about 0.01 per unit of volatility. If you would invest 1,715,000 in Mobileleader CoLtd on September 25, 2024 and sell it today you would lose (2,000) from holding Mobileleader CoLtd or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derkwoo Electronics Co vs. Mobileleader CoLtd
Performance |
| Timeline |
| Derkwoo Electronics |
| Mobileleader CoLtd |
Derkwoo Electronics and Mobileleader CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derkwoo Electronics and Mobileleader CoLtd
The main advantage of trading using opposite Derkwoo Electronics and Mobileleader CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derkwoo Electronics position performs unexpectedly, Mobileleader CoLtd 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 Mobileleader CoLtd will offset losses from the drop in Mobileleader CoLtd's long position.| Derkwoo Electronics vs. Youngsin Metal Industrial | Derkwoo Electronics vs. Haesung Industrial Co | Derkwoo Electronics vs. Daiyang Metal Co | Derkwoo Electronics vs. ITM Semiconductor Co |
| Mobileleader CoLtd vs. Dongsin Engineering Construction | Mobileleader CoLtd vs. Doosan Fuel Cell | Mobileleader CoLtd vs. Daishin Balance 1 | Mobileleader CoLtd 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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