Correlation Between CG Hi and Daejoo
Can any of the company-specific risk be diversified away by investing in both CG Hi and Daejoo 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 CG Hi and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CG Hi Tech and Daejoo Inc, you can compare the effects of market volatilities on CG Hi and Daejoo 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 CG Hi with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CG Hi and Daejoo.
Diversification Opportunities for CG Hi and Daejoo
Modest diversification
The 3 months correlation between 264660 and Daejoo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CG Hi Tech and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and CG Hi 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 CG Hi Tech are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of CG Hi i.e., CG Hi and Daejoo go up and down completely randomly.
Pair Corralation between CG Hi and Daejoo
Assuming the 90 days trading horizon CG Hi Tech is expected to generate 4.81 times more return on investment than Daejoo. However, CG Hi is 4.81 times more volatile than Daejoo Inc. It trades about 0.22 of its potential returns per unit of risk. Daejoo Inc is currently generating about 0.09 per unit of risk. If you would invest 974,257 in CG Hi Tech on October 23, 2024 and sell it today you would earn a total of 179,743 from holding CG Hi Tech or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
CG Hi Tech vs. Daejoo Inc
Performance |
| Timeline |
| CG Hi Tech |
| Daejoo Inc |
CG Hi and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CG Hi and Daejoo
The main advantage of trading using opposite CG Hi and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CG Hi position performs unexpectedly, Daejoo 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 Daejoo will offset losses from the drop in Daejoo's long position.| CG Hi vs. Korea Air Svc | CG Hi vs. Handok Clean Tech | CG Hi vs. Air Busan Co | CG Hi vs. Aprogen Healthcare Games |
| Daejoo vs. LS Materials | Daejoo vs. Phoenix Materials Co | Daejoo vs. Digital Power Communications | Daejoo vs. Lotte Data Communication |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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