Correlation Between Daesung Industrial and Daesung Eltec
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial and Daesung Eltec 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 Daesung Industrial and Daesung Eltec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Industrial Co and Daesung Eltec Co, you can compare the effects of market volatilities on Daesung Industrial and Daesung Eltec 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 Daesung Industrial with a short position of Daesung Eltec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and Daesung Eltec.
Diversification Opportunities for Daesung Industrial and Daesung Eltec
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daesung and Daesung is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial Co and Daesung Eltec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Eltec and Daesung Industrial 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 Daesung Industrial Co are associated (or correlated) with Daesung Eltec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Eltec has no effect on the direction of Daesung Industrial i.e., Daesung Industrial and Daesung Eltec go up and down completely randomly.
Pair Corralation between Daesung Industrial and Daesung Eltec
Assuming the 90 days trading horizon Daesung Industrial Co is expected to generate 0.34 times more return on investment than Daesung Eltec. However, Daesung Industrial Co is 2.98 times less risky than Daesung Eltec. It trades about 0.05 of its potential returns per unit of risk. Daesung Eltec Co is currently generating about -0.02 per unit of risk. If you would invest 327,000 in Daesung Industrial Co on December 26, 2024 and sell it today you would earn a total of 15,500 from holding Daesung Industrial Co or generate 4.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daesung Industrial Co vs. Daesung Eltec Co
Performance |
Timeline |
Daesung Industrial |
Daesung Eltec |
Daesung Industrial and Daesung Eltec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daesung Industrial and Daesung Eltec
The main advantage of trading using opposite Daesung Industrial and Daesung Eltec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial position performs unexpectedly, Daesung Eltec 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 Daesung Eltec will offset losses from the drop in Daesung Eltec's long position.Daesung Industrial vs. AptaBio Therapeutics | Daesung Industrial vs. Daewoo SBI SPAC | Daesung Industrial vs. Dream Security co | Daesung Industrial vs. Microfriend |
Daesung Eltec vs. SEOJEON ELECTRIC MACHINERY | Daesung Eltec vs. Pan Entertainment Co | Daesung Eltec vs. Kyeryong Construction Industrial | Daesung Eltec vs. Keyang Electric Machinery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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