Correlation Between Daishin Balance and Koh Young
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Koh Young 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 Koh Young 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 Koh Young Technology, you can compare the effects of market volatilities on Daishin Balance and Koh Young 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 Koh Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Koh Young.
Diversification Opportunities for Daishin Balance and Koh Young
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Koh is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and Koh Young Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koh Young Technology 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 Koh Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koh Young Technology has no effect on the direction of Daishin Balance i.e., Daishin Balance and Koh Young go up and down completely randomly.
Pair Corralation between Daishin Balance and Koh Young
Assuming the 90 days trading horizon Daishin Balance No8 is expected to under-perform the Koh Young. In addition to that, Daishin Balance is 1.03 times more volatile than Koh Young Technology. It trades about -0.04 of its total potential returns per unit of risk. Koh Young Technology is currently generating about -0.02 per unit of volatility. If you would invest 1,392,651 in Koh Young Technology on August 31, 2024 and sell it today you would lose (545,651) from holding Koh Young Technology or give up 39.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Daishin Balance No8 vs. Koh Young Technology
Performance |
| Timeline |
| Daishin Balance No8 |
| Koh Young Technology |
Daishin Balance and Koh Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Koh Young
The main advantage of trading using opposite Daishin Balance and Koh Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Koh Young 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 Koh Young will offset losses from the drop in Koh Young's long position.| Daishin Balance vs. Samsung Electronics Co | Daishin Balance vs. Samsung Electronics Co | Daishin Balance vs. LG Energy Solution | Daishin Balance vs. SK Hynix |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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