Correlation Between Kyung In and Daishin Balance

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

By analyzing existing cross correlation between Kyung In Synthetic Corp and Daishin Balance 1, you can compare the effects of market volatilities on Kyung In and Daishin Balance 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 Kyung In with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and Daishin Balance.

Diversification Opportunities for Kyung In and Daishin Balance

0.08

Correlation Coefficient

Kyung In  Daishin Balance

Significant diversification

The 3 months correlation between Kyung and Daishin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp and Daishin Balance 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance 1 and Kyung In 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 Kyung In Synthetic Corp are associated (or correlated) with Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance 1 has no effect on the direction of Kyung In i.e., Kyung In and Daishin Balance go up and down completely randomly.

Pair Corralation between Kyung In and Daishin Balance

Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to under-perform the Daishin Balance. But the stock apears to be less risky and, when comparing its historical volatility, Kyung In Synthetic Corp is 1.88 times less risky than Daishin Balance. The stock trades about 0.0 of its potential returns per unit of risk. The Daishin Balance 1 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  535,000  in Daishin Balance 1 on October 22, 2024 and sell it today you would earn a total of  52,000  from holding Daishin Balance 1 or generate 9.72% return on investment over 90 days.

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

Kyung In Synthetic Corp  vs.  Daishin Balance 1

Kyung In Synthetic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyung In Synthetic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kyung In is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Daishin Balance 1

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Daishin Balance 1 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daishin Balance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kyung In and Daishin Balance

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

The idea behind Kyung In Synthetic Corp and Daishin Balance 1 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.