Correlation Between DAIDO METAL and Hongkong
Can any of the company-specific risk be diversified away by investing in both DAIDO METAL and Hongkong 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 DAIDO METAL and Hongkong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIDO METAL TD and The Hongkong and, you can compare the effects of market volatilities on DAIDO METAL and Hongkong 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 DAIDO METAL with a short position of Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIDO METAL and Hongkong.
Diversification Opportunities for DAIDO METAL and Hongkong
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAIDO and Hongkong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DAIDO METAL TD and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong and DAIDO METAL 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 DAIDO METAL TD are associated (or correlated) with Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of DAIDO METAL i.e., DAIDO METAL and Hongkong go up and down completely randomly.
Pair Corralation between DAIDO METAL and Hongkong
Assuming the 90 days horizon DAIDO METAL TD is expected to generate 2.11 times more return on investment than Hongkong. However, DAIDO METAL is 2.11 times more volatile than The Hongkong and. It trades about 0.08 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.09 per unit of risk. If you would invest 286.00 in DAIDO METAL TD on October 23, 2024 and sell it today you would earn a total of 6.00 from holding DAIDO METAL TD or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
DAIDO METAL TD vs. The Hongkong and
Performance |
| Timeline |
| DAIDO METAL TD |
| The Hongkong |
DAIDO METAL and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIDO METAL and Hongkong
The main advantage of trading using opposite DAIDO METAL and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIDO METAL position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| DAIDO METAL vs. Telecom Argentina SA | DAIDO METAL vs. HUTCHISON TELECOMM | DAIDO METAL vs. WisdomTree Investments | DAIDO METAL vs. China Communications Services |
| Hongkong vs. ULTRA CLEAN HLDGS | Hongkong vs. ADRIATIC METALS LS 013355 | Hongkong vs. DAIDO METAL TD | Hongkong vs. SIERRA METALS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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