Correlation Between Daelim Trading and Naver

Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Naver 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 Daelim Trading and Naver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daelim Trading Co and Naver, you can compare the effects of market volatilities on Daelim Trading and Naver 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 Daelim Trading with a short position of Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Naver.

Diversification Opportunities for Daelim Trading and Naver

-0.52

Correlation Coefficient

Daelim Trading  Naver

Excellent diversification

The 3 months correlation between Daelim and Naver is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of Daelim Trading i.e., Daelim Trading and Naver go up and down completely randomly.

Pair Corralation between Daelim Trading and Naver

Assuming the 90 days trading horizon Daelim Trading Co is expected to under-perform the Naver. In addition to that, Daelim Trading is 1.33 times more volatile than Naver. It trades about -0.05 of its total potential returns per unit of risk. Naver is currently generating about 0.26 per unit of volatility. If you would invest  16,000,000  in Naver on September 12, 2024 and sell it today you would earn a total of  4,900,000  from holding Naver or generate 30.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Daelim Trading Co  vs.  Naver

Daelim Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daelim Trading Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Naver

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Naver are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Naver sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Daelim Trading and Naver

The main advantage of trading using opposite Daelim Trading and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.

The idea behind Daelim Trading Co and Naver 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.