Correlation Between BGF Retail and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both BGF Retail and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on BGF Retail and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and DAEDUCK ELECTRONICS.
Diversification Opportunities for BGF Retail and DAEDUCK ELECTRONICS
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BGF and DAEDUCK is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of BGF Retail i.e., BGF Retail and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between BGF Retail and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the DAEDUCK ELECTRONICS. In addition to that, BGF Retail is 1.22 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about -0.06 of its total potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.01 per unit of volatility. If you would invest 969,655 in DAEDUCK ELECTRONICS CoLtd on August 30, 2024 and sell it today you would lose (145,655) from holding DAEDUCK ELECTRONICS CoLtd or give up 15.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| BGF Retail |
| DAEDUCK ELECTRONICS CoLtd |
BGF Retail and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and DAEDUCK ELECTRONICS
The main advantage of trading using opposite BGF Retail and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| BGF Retail vs. Samsung Electronics Co | BGF Retail vs. Samsung Electronics Co | BGF Retail vs. Hyundai Motor Co | BGF Retail vs. Hyundai Motor |
| DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Busan Industrial Co | DAEDUCK ELECTRONICS vs. Busan Ind | DAEDUCK ELECTRONICS vs. Shinhan WTI Futures |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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