Correlation Between Daeduck Electronics and TR Biofab

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

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

Diversification Opportunities for Daeduck Electronics and TR Biofab

-0.68

Correlation Coefficient

Daeduck Electronics  TR Biofab

Excellent diversification

The 3 months correlation between Daeduck and 246710 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and TR Biofab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Biofab and Daeduck Electronics 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 Daeduck Electronics Co are associated (or correlated) with TR Biofab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Biofab has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and TR Biofab go up and down completely randomly.

Pair Corralation between Daeduck Electronics and TR Biofab

Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.29 times more return on investment than TR Biofab. However, Daeduck Electronics Co is 3.48 times less risky than TR Biofab. It trades about 0.12 of its potential returns per unit of risk. TR Biofab Co is currently generating about -0.04 per unit of risk. If you would invest  622,000  in Daeduck Electronics Co on September 13, 2024 and sell it today you would earn a total of  39,000  from holding Daeduck Electronics Co or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Daeduck Electronics Co  vs.  TR Biofab Co

Daeduck Electronics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daeduck Electronics Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daeduck Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TR Biofab

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TR Biofab 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.

Pair Trading with Daeduck Electronics and TR Biofab

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

The idea behind Daeduck Electronics Co and TR Biofab 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.