Correlation Between DAEMO Engineering and Booster
Can any of the company-specific risk be diversified away by investing in both DAEMO Engineering and Booster 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 DAEMO Engineering and Booster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEMO Engineering Co and Booster Co, you can compare the effects of market volatilities on DAEMO Engineering and Booster 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 DAEMO Engineering with a short position of Booster. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEMO Engineering and Booster.
Diversification Opportunities for DAEMO Engineering and Booster
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAEMO and Booster is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding DAEMO Engineering Co and Booster Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booster and DAEMO Engineering 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 DAEMO Engineering Co are associated (or correlated) with Booster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booster has no effect on the direction of DAEMO Engineering i.e., DAEMO Engineering and Booster go up and down completely randomly.
Pair Corralation between DAEMO Engineering and Booster
Assuming the 90 days trading horizon DAEMO Engineering Co is expected to generate 2.91 times more return on investment than Booster. However, DAEMO Engineering is 2.91 times more volatile than Booster Co. It trades about 0.03 of its potential returns per unit of risk. Booster Co is currently generating about -0.04 per unit of risk. If you would invest 879,000 in DAEMO Engineering Co on September 1, 2024 and sell it today you would earn a total of 61,000 from holding DAEMO Engineering Co or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEMO Engineering Co vs. Booster Co
Performance |
| Timeline |
| DAEMO Engineering |
| Booster |
DAEMO Engineering and Booster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEMO Engineering and Booster
The main advantage of trading using opposite DAEMO Engineering and Booster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEMO Engineering position performs unexpectedly, Booster 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 Booster will offset losses from the drop in Booster's long position.| DAEMO Engineering vs. COWINTECH Co | DAEMO Engineering vs. Young Poong Precision | DAEMO Engineering vs. Seoam Machinery Industry | DAEMO Engineering vs. Haisung TPC Co |
| Booster vs. COWINTECH Co | Booster vs. Young Poong Precision | Booster vs. Seoam Machinery Industry | Booster vs. Haisung TPC Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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