Correlation Between DAEDUCK ELECTRONICS and Finebesteel
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Finebesteel.
Diversification Opportunities for DAEDUCK ELECTRONICS and Finebesteel
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAEDUCK and Finebesteel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Finebesteel go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Finebesteel
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS is expected to generate 5.59 times less return on investment than Finebesteel. But when comparing it to its historical volatility, DAEDUCK ELECTRONICS CoLtd is 2.07 times less risky than Finebesteel. It trades about 0.1 of its potential returns per unit of risk. Finebesteel is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 91,900 in Finebesteel on November 3, 2024 and sell it today you would earn a total of 14,600 from holding Finebesteel or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Finebesteel
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Finebesteel |
DAEDUCK ELECTRONICS and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Finebesteel
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| DAEDUCK ELECTRONICS vs. Chorokbaem Healthcare Co | DAEDUCK ELECTRONICS vs. SCI Information Service | DAEDUCK ELECTRONICS vs. INFINITT Healthcare Co | DAEDUCK ELECTRONICS vs. Moadata Co |
| Finebesteel vs. SK Telecom Co | Finebesteel vs. Daou Data Corp | Finebesteel vs. SCI Information Service | Finebesteel vs. Inzi Display CoLtd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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