Correlation Between Daishin Balance and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Okins 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 Daishin Balance and Okins Electronics 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 Okins Electronics Co, you can compare the effects of market volatilities on Daishin Balance and Okins 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 Daishin Balance with a short position of Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Okins Electronics.
Diversification Opportunities for Daishin Balance and Okins Electronics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Okins is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of Daishin Balance i.e., Daishin Balance and Okins Electronics go up and down completely randomly.
Pair Corralation between Daishin Balance and Okins Electronics
Assuming the 90 days trading horizon Daishin Balance No is expected to under-perform the Okins Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Daishin Balance No is 1.44 times less risky than Okins Electronics. The stock trades about -0.09 of its potential returns per unit of risk. The Okins Electronics Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 558,000 in Okins Electronics Co on October 24, 2024 and sell it today you would earn a total of 2,000 from holding Okins Electronics Co or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No vs. Okins Electronics Co
Performance |
| Timeline |
| Daishin Balance No |
| Okins Electronics |
Daishin Balance and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Okins Electronics
The main advantage of trading using opposite Daishin Balance and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Okins 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| Daishin Balance vs. Daishin Information Communications | Daishin Balance vs. Hanshin Construction Co | Daishin Balance vs. Woorim Machinery Co | Daishin Balance vs. DB Insurance Co |
| Okins Electronics vs. Daishin Balance No8 | Okins Electronics vs. NAU IB Capital | Okins Electronics vs. Daishin Balance No | Okins Electronics vs. Daesung Private Equity |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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