Correlation Between Daifuku and Rosinbomb
Can any of the company-specific risk be diversified away by investing in both Daifuku and Rosinbomb 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 Daifuku and Rosinbomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daifuku Co and Rosinbomb, you can compare the effects of market volatilities on Daifuku and Rosinbomb 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 Daifuku with a short position of Rosinbomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daifuku and Rosinbomb.
Diversification Opportunities for Daifuku and Rosinbomb
Very good diversification
The 3 months correlation between Daifuku and Rosinbomb is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Daifuku Co and Rosinbomb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosinbomb and Daifuku 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 Daifuku Co are associated (or correlated) with Rosinbomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosinbomb has no effect on the direction of Daifuku i.e., Daifuku and Rosinbomb go up and down completely randomly.
Pair Corralation between Daifuku and Rosinbomb
Assuming the 90 days horizon Daifuku is expected to generate 9.09 times less return on investment than Rosinbomb. But when comparing it to its historical volatility, Daifuku Co is 6.78 times less risky than Rosinbomb. It trades about 0.03 of its potential returns per unit of risk. Rosinbomb is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.35 in Rosinbomb on September 3, 2024 and sell it today you would lose (1.05) from holding Rosinbomb or give up 77.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daifuku Co vs. Rosinbomb
Performance |
| Timeline |
| Daifuku |
| Rosinbomb |
Daifuku and Rosinbomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daifuku and Rosinbomb
The main advantage of trading using opposite Daifuku and Rosinbomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daifuku position performs unexpectedly, Rosinbomb 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 Rosinbomb will offset losses from the drop in Rosinbomb's long position.The idea behind Daifuku Co and Rosinbomb pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Rosinbomb vs. Dear Cashmere Holding | Rosinbomb vs. Goff Corp | Rosinbomb vs. Wialan Technologies | Rosinbomb vs. Cgrowth Capital |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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