Correlation Between Daol Investment and Korea Shipbuilding

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Daol Investment and Korea Shipbuilding 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 Daol Investment and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daol Investment Securities and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Daol Investment and Korea Shipbuilding 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 Daol Investment with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and Korea Shipbuilding.

Diversification Opportunities for Daol Investment and Korea Shipbuilding

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Daol and Korea is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and Daol Investment 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 Daol Investment Securities are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Daol Investment i.e., Daol Investment and Korea Shipbuilding go up and down completely randomly.

Pair Corralation between Daol Investment and Korea Shipbuilding

Assuming the 90 days trading horizon Daol Investment Securities is expected to under-perform the Korea Shipbuilding. But the stock apears to be less risky and, when comparing its historical volatility, Daol Investment Securities is 1.85 times less risky than Korea Shipbuilding. The stock trades about -0.18 of its potential returns per unit of risk. The Korea Shipbuilding Offshore is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  18,070,000  in Korea Shipbuilding Offshore on September 5, 2024 and sell it today you would earn a total of  1,650,000  from holding Korea Shipbuilding Offshore or generate 9.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Daol Investment Securities  vs.  Korea Shipbuilding Offshore

 Performance 
       Timeline  
Daol Investment Secu 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Daol Investment Securities 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.
Korea Shipbuilding 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Korea Shipbuilding Offshore are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Korea Shipbuilding sustained solid returns over the last few months and may actually be approaching a breakup point.

Daol Investment and Korea Shipbuilding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Daol Investment and Korea Shipbuilding

The main advantage of trading using opposite Daol Investment and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daol Investment position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.
The idea behind Daol Investment Securities and Korea Shipbuilding Offshore 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.
Check out your portfolio center.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Stocks Directory
Find actively traded stocks across global markets
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance