Correlation Between Daelim Industrial and V One

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

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

Diversification Opportunities for Daelim Industrial and V One

0.77

Correlation Coefficient

Daelim Industrial  V One

Poor diversification

The 3 months correlation between Daelim and 251630 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Industrial Co and V One Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V One Tech and Daelim Industrial 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 Industrial Co are associated (or correlated) with V One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V One Tech has no effect on the direction of Daelim Industrial i.e., Daelim Industrial and V One go up and down completely randomly.

Pair Corralation between Daelim Industrial and V One

Assuming the 90 days trading horizon Daelim Industrial Co is expected to generate 0.61 times more return on investment than V One. However, Daelim Industrial Co is 1.65 times less risky than V One. It trades about -0.16 of its potential returns per unit of risk. V One Tech Co is currently generating about -0.11 per unit of risk. If you would invest  2,475,000  in Daelim Industrial Co on September 13, 2024 and sell it today you would lose (415,000) from holding Daelim Industrial Co or give up 16.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Daelim Industrial Co  vs.  V One Tech Co

Daelim Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daelim Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

V One Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days V One Tech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Daelim Industrial and V One

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

The idea behind Daelim Industrial Co and V One Tech Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..