Correlation Between Daishin Balance and Korea Information
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Korea Information 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 Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No8 and Korea Information Engineering, you can compare the effects of market volatilities on Daishin Balance and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Korea Information.
Diversification Opportunities for Daishin Balance and Korea Information
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Korea is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 No8 are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Daishin Balance i.e., Daishin Balance and Korea Information go up and down completely randomly.
Pair Corralation between Daishin Balance and Korea Information
Assuming the 90 days trading horizon Daishin Balance No8 is expected to generate 2.08 times more return on investment than Korea Information. However, Daishin Balance is 2.08 times more volatile than Korea Information Engineering. It trades about 0.24 of its potential returns per unit of risk. Korea Information Engineering is currently generating about 0.09 per unit of risk. If you would invest 469,000 in Daishin Balance No8 on November 3, 2024 and sell it today you would earn a total of 84,000 from holding Daishin Balance No8 or generate 17.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. Korea Information Engineering
Performance |
| Timeline |
| Daishin Balance No8 |
| Korea Information |
Daishin Balance and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Korea Information
The main advantage of trading using opposite Daishin Balance and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Daishin Balance vs. Wonil Special Steel | Daishin Balance vs. EBEST Investment Securities | Daishin Balance vs. Finebesteel | Daishin Balance vs. Daehan Steel |
| Korea Information vs. BIT Computer Co | Korea Information vs. Daesung Hi Tech Co | Korea Information vs. Dongil Metal Co | Korea Information vs. Display Tech 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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