Correlation Between DAEDUCK ELECTRONICS and KT Hitel
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and KT Hitel 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 KT Hitel 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 KT Hitel, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and KT Hitel 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 KT Hitel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and KT Hitel.
Diversification Opportunities for DAEDUCK ELECTRONICS and KT Hitel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAEDUCK and 036030 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and KT Hitel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Hitel 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 KT Hitel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Hitel has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and KT Hitel go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and KT Hitel
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.7 times more return on investment than KT Hitel. However, DAEDUCK ELECTRONICS CoLtd is 1.43 times less risky than KT Hitel. It trades about -0.02 of its potential returns per unit of risk. KT Hitel is currently generating about -0.05 per unit of risk. If you would invest 1,031,650 in DAEDUCK ELECTRONICS CoLtd on October 29, 2024 and sell it today you would lose (190,650) from holding DAEDUCK ELECTRONICS CoLtd or give up 18.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. KT Hitel
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| KT Hitel |
DAEDUCK ELECTRONICS and KT Hitel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and KT Hitel
The main advantage of trading using opposite DAEDUCK ELECTRONICS and KT Hitel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, KT Hitel 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 KT Hitel will offset losses from the drop in KT Hitel's long position.| DAEDUCK ELECTRONICS vs. Hankook Furniture Co | DAEDUCK ELECTRONICS vs. Leaders Technology Investment | DAEDUCK ELECTRONICS vs. Daol Investment Securities | DAEDUCK ELECTRONICS vs. GS Retail Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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