Correlation Between Daishin Information and Aprogen KIC

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

By analyzing existing cross correlation between Daishin Information Communications and Aprogen KIC, you can compare the effects of market volatilities on Daishin Information and Aprogen KIC 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 Daishin Information with a short position of Aprogen KIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Aprogen KIC.

Diversification Opportunities for Daishin Information and Aprogen KIC

-0.64

Correlation Coefficient

Daishin Information  Aprogen KIC

Excellent diversification

The 3 months correlation between Daishin and Aprogen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Aprogen KIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen KIC and Daishin Information 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 Daishin Information Communications are associated (or correlated) with Aprogen KIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen KIC has no effect on the direction of Daishin Information i.e., Daishin Information and Aprogen KIC go up and down completely randomly.

Pair Corralation between Daishin Information and Aprogen KIC

Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 1.09 times more return on investment than Aprogen KIC. However, Daishin Information is 1.09 times more volatile than Aprogen KIC. It trades about 0.09 of its potential returns per unit of risk. Aprogen KIC is currently generating about -0.14 per unit of risk. If you would invest  90,700  in Daishin Information Communications on October 8, 2024 and sell it today you would earn a total of  18,700  from holding Daishin Information Communications or generate 20.62% return on investment over 90 days.

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

Daishin Information Communicat  vs.  Aprogen KIC

Daishin Information

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daishin Information Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daishin Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Aprogen KIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen KIC 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.

Pair Trading with Daishin Information and Aprogen KIC

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

The idea behind Daishin Information Communications and Aprogen KIC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.