Correlation Between Daishin Balance and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Korea Computer 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 Daishin Balance and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No and Korea Computer, you can compare the effects of market volatilities on Daishin Balance and Korea Computer 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 Daishin Balance with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Korea Computer.
Diversification Opportunities for Daishin Balance and Korea Computer
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daishin and Korea is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer and Daishin Balance 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 Daishin Balance No are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Daishin Balance i.e., Daishin Balance and Korea Computer go up and down completely randomly.
Pair Corralation between Daishin Balance and Korea Computer
Assuming the 90 days trading horizon Daishin Balance No is expected to under-perform the Korea Computer. But the stock apears to be less risky and, when comparing its historical volatility, Daishin Balance No is 1.11 times less risky than Korea Computer. The stock trades about -0.07 of its potential returns per unit of risk. The Korea Computer is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 450,923 in Korea Computer on November 3, 2024 and sell it today you would earn a total of 51,077 from holding Korea Computer or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No vs. Korea Computer
Performance |
| Timeline |
| Daishin Balance No |
| Korea Computer |
Daishin Balance and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Korea Computer
The main advantage of trading using opposite Daishin Balance and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer's long position.| Daishin Balance vs. Anam Electronics Co | Daishin Balance vs. Lotte Data Communication | Daishin Balance vs. Sejong Telecom | Daishin Balance vs. Seoul Semiconductor Co |
| Korea Computer vs. Hankook Steel Co | Korea Computer vs. Fine Besteel Co | Korea Computer vs. INSUN Environmental New | Korea Computer vs. Wonil Special Steel |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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