Correlation Between Daebo Magnetic and Humax
Can any of the company-specific risk be diversified away by investing in both Daebo Magnetic and Humax 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 Daebo Magnetic and Humax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daebo Magnetic CoLtd and Humax Co, you can compare the effects of market volatilities on Daebo Magnetic and Humax 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 Daebo Magnetic with a short position of Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daebo Magnetic and Humax.
Diversification Opportunities for Daebo Magnetic and Humax
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daebo and Humax is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Daebo Magnetic CoLtd and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax and Daebo Magnetic 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 Daebo Magnetic CoLtd are associated (or correlated) with Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of Daebo Magnetic i.e., Daebo Magnetic and Humax go up and down completely randomly.
Pair Corralation between Daebo Magnetic and Humax
Assuming the 90 days trading horizon Daebo Magnetic CoLtd is expected to under-perform the Humax. In addition to that, Daebo Magnetic is 1.34 times more volatile than Humax Co. It trades about -0.08 of its total potential returns per unit of risk. Humax Co is currently generating about -0.08 per unit of volatility. If you would invest 368,000 in Humax Co on December 4, 2024 and sell it today you would lose (249,300) from holding Humax Co or give up 67.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Daebo Magnetic CoLtd vs. Humax Co
Performance |
| Timeline |
| Daebo Magnetic CoLtd |
| Humax |
Daebo Magnetic and Humax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daebo Magnetic and Humax
The main advantage of trading using opposite Daebo Magnetic and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daebo Magnetic position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax's long position.| Daebo Magnetic vs. Kukil Metal Co | Daebo Magnetic vs. Sungho Electronics Corp | Daebo Magnetic vs. ABCO Electronics Co | Daebo Magnetic vs. LEENO Industrial |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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