Correlation Between Han Kook and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Han Kook and Daishin Information 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 Han Kook and Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Steel and Daishin Information Communications, you can compare the effects of market volatilities on Han Kook and Daishin Information 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 Han Kook with a short position of Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Daishin Information.
Diversification Opportunities for Han Kook and Daishin Information
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Han and Daishin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information and Han Kook 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 Han Kook Steel are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Han Kook i.e., Han Kook and Daishin Information go up and down completely randomly.
Pair Corralation between Han Kook and Daishin Information
Assuming the 90 days trading horizon Han Kook is expected to generate 6.07 times less return on investment than Daishin Information. In addition to that, Han Kook is 2.13 times more volatile than Daishin Information Communications. It trades about 0.01 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about 0.12 per unit of volatility. If you would invest 88,000 in Daishin Information Communications on September 12, 2024 and sell it today you would earn a total of 11,800 from holding Daishin Information Communications or generate 13.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Han Kook Steel vs. Daishin Information Communicat
Performance |
Timeline |
Han Kook Steel |
Daishin Information |
Han Kook and Daishin Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Han Kook and Daishin Information
The main advantage of trading using opposite Han Kook and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.Han Kook vs. Kakao Games Corp | Han Kook vs. Jeju Beer Co | Han Kook vs. Koh Young Technology | Han Kook vs. AeroSpace Technology of |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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