Correlation Between Daishin Balance and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and KHVATEC CoLtd 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 KHVATEC CoLtd 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 KHVATEC CoLtd, you can compare the effects of market volatilities on Daishin Balance and KHVATEC CoLtd 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 KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and KHVATEC CoLtd.
Diversification Opportunities for Daishin Balance and KHVATEC CoLtd
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and KHVATEC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd 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 KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of Daishin Balance i.e., Daishin Balance and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between Daishin Balance and KHVATEC CoLtd
Assuming the 90 days trading horizon Daishin Balance No8 is expected to under-perform the KHVATEC CoLtd. In addition to that, Daishin Balance is 1.68 times more volatile than KHVATEC CoLtd. It trades about -0.15 of its total potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.18 per unit of volatility. If you would invest 1,549,270 in KHVATEC CoLtd on September 3, 2024 and sell it today you would lose (724,270) from holding KHVATEC CoLtd or give up 46.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. KHVATEC CoLtd
Performance |
| Timeline |
| Daishin Balance No8 |
| KHVATEC CoLtd |
Daishin Balance and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and KHVATEC CoLtd
The main advantage of trading using opposite Daishin Balance and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd's long position.| Daishin Balance vs. Hwangkum Steel Technology | Daishin Balance vs. Duksan Hi Metal | Daishin Balance vs. Dongil Metal Co | Daishin Balance vs. Global Standard Technology |
| KHVATEC CoLtd vs. Dongsin Engineering Construction | KHVATEC CoLtd vs. Doosan Fuel Cell | KHVATEC CoLtd vs. Daishin Balance 1 | KHVATEC CoLtd vs. Total Soft Bank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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