Correlation Between Daehan Synthetic and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and Daol Investment 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 Daehan Synthetic and Daol Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and Daol Investment Securities, you can compare the effects of market volatilities on Daehan Synthetic and Daol Investment 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 Daehan Synthetic with a short position of Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and Daol Investment.
Diversification Opportunities for Daehan Synthetic and Daol Investment
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daehan and Daol is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and Daol Investment go up and down completely randomly.
Pair Corralation between Daehan Synthetic and Daol Investment
Assuming the 90 days trading horizon Daehan Synthetic is expected to generate 4.32 times less return on investment than Daol Investment. But when comparing it to its historical volatility, Daehan Synthetic Fiber is 1.9 times less risky than Daol Investment. It trades about 0.01 of its potential returns per unit of risk. Daol Investment Securities is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 304,500 in Daol Investment Securities on September 23, 2024 and sell it today you would earn a total of 3,000 from holding Daol Investment Securities or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Daehan Synthetic Fiber vs. Daol Investment Securities
Performance |
Timeline |
Daehan Synthetic Fiber |
Daol Investment Secu |
Daehan Synthetic and Daol Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daehan Synthetic and Daol Investment
The main advantage of trading using opposite Daehan Synthetic and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment's long position.Daehan Synthetic vs. AptaBio Therapeutics | Daehan Synthetic vs. Wonbang Tech Co | Daehan Synthetic vs. Busan Industrial Co | Daehan Synthetic vs. Busan Ind |
Daol Investment vs. MetaLabs Co | Daol Investment vs. Daehan Synthetic Fiber | Daol Investment vs. DONGKUK TED METAL | Daol Investment vs. Korea Alcohol Industrial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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