Correlation Between DAEDUCK ELECTRONICS and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and Busan Industrial 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 DAEDUCK ELECTRONICS and Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and Busan Industrial Co, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and Busan Industrial 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 DAEDUCK ELECTRONICS with a short position of Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Busan Industrial.
Diversification Opportunities for DAEDUCK ELECTRONICS and Busan Industrial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAEDUCK and Busan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Industrial and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd are associated (or correlated) with Busan Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Industrial has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Busan Industrial go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Busan Industrial
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.48 times more return on investment than Busan Industrial. However, DAEDUCK ELECTRONICS CoLtd is 2.09 times less risky than Busan Industrial. It trades about 0.33 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.09 per unit of risk. If you would invest 716,000 in DAEDUCK ELECTRONICS CoLtd on October 10, 2024 and sell it today you would earn a total of 104,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Busan Industrial Co
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Busan Industrial |
DAEDUCK ELECTRONICS and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Busan Industrial
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, Busan Industrial 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 Busan Industrial will offset losses from the drop in Busan Industrial's long position.| DAEDUCK ELECTRONICS vs. Daelim Trading Co | DAEDUCK ELECTRONICS vs. SCI Information Service | DAEDUCK ELECTRONICS vs. DB Financial Investment | DAEDUCK ELECTRONICS vs. Worldex Industry Trading |
| Busan Industrial vs. KTB Investment Securities | Busan Industrial vs. SBI Investment KOREA | Busan Industrial vs. TS Investment Corp | Busan Industrial vs. Handok Clean Tech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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