Correlation Between BGF Retail and Daewoo Engineering
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Daewoo Engineering 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 BGF Retail and Daewoo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Daewoo Engineering Construction, you can compare the effects of market volatilities on BGF Retail and Daewoo Engineering 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 BGF Retail with a short position of Daewoo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Daewoo Engineering.
Diversification Opportunities for BGF Retail and Daewoo Engineering
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGF and Daewoo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Daewoo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Engineering and BGF Retail 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 BGF Retail Co are associated (or correlated) with Daewoo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Engineering has no effect on the direction of BGF Retail i.e., BGF Retail and Daewoo Engineering go up and down completely randomly.
Pair Corralation between BGF Retail and Daewoo Engineering
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Daewoo Engineering. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.05 times less risky than Daewoo Engineering. The stock trades about -0.05 of its potential returns per unit of risk. The Daewoo Engineering Construction is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 412,500 in Daewoo Engineering Construction on November 27, 2024 and sell it today you would lose (53,500) from holding Daewoo Engineering Construction or give up 12.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Daewoo Engineering Constructio
Performance |
| Timeline |
| BGF Retail |
| Daewoo Engineering |
BGF Retail and Daewoo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Daewoo Engineering
The main advantage of trading using opposite BGF Retail and Daewoo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Daewoo Engineering 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 Daewoo Engineering will offset losses from the drop in Daewoo Engineering's long position.| BGF Retail vs. Cots Technology Co | BGF Retail vs. ADTechnology CoLtd | BGF Retail vs. SEOJEON ELECTRIC MACHINERY | BGF Retail vs. Kyeryong Construction Industrial |
| Daewoo Engineering vs. Bookook Steel | Daewoo Engineering vs. Hyundai BNG Steel | Daewoo Engineering vs. GAMEVIL | Daewoo Engineering vs. Netmarble Games Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |