Correlation Between Daiyang Metal and Koryo Credit

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

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

Diversification Opportunities for Daiyang Metal and Koryo Credit

0.11

Correlation Coefficient

Daiyang Metal  Koryo Credit

Average diversification

The 3 months correlation between Daiyang and Koryo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Koryo Credit go up and down completely randomly.

Pair Corralation between Daiyang Metal and Koryo Credit

Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the Koryo Credit. In addition to that, Daiyang Metal is 4.67 times more volatile than Koryo Credit Information. It trades about -0.03 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about -0.02 per unit of volatility. If you would invest  1,062,817  in Koryo Credit Information on October 9, 2024 and sell it today you would lose (50,817) from holding Koryo Credit Information or give up 4.78% of portfolio value over 90 days.

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

Daiyang Metal Co  vs.  Koryo Credit Information

Daiyang Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daiyang Metal 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Koryo Credit Information

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koryo Credit Information are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Koryo Credit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Daiyang Metal and Koryo Credit

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

The idea behind Daiyang Metal Co and Koryo Credit Information 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.