Correlation Between Daesung Hi and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Daesung Hi and BIT Computer 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 Hi and BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Hi Tech Co and BIT Computer Co, you can compare the effects of market volatilities on Daesung Hi and BIT Computer 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 Hi with a short position of BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Hi and BIT Computer.
Diversification Opportunities for Daesung Hi and BIT Computer
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daesung and BIT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Hi Tech Co and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer and Daesung Hi 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 Hi Tech Co are associated (or correlated) with BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Daesung Hi i.e., Daesung Hi and BIT Computer go up and down completely randomly.
Pair Corralation between Daesung Hi and BIT Computer
Assuming the 90 days trading horizon Daesung Hi Tech Co is expected to generate 4.09 times more return on investment than BIT Computer. However, Daesung Hi is 4.09 times more volatile than BIT Computer Co. It trades about 0.1 of its potential returns per unit of risk. BIT Computer Co is currently generating about -0.1 per unit of risk. If you would invest 329,000 in Daesung Hi Tech Co on December 30, 2024 and sell it today you would earn a total of 90,000 from holding Daesung Hi Tech Co or generate 27.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Daesung Hi Tech Co vs. BIT Computer Co
Performance |
Timeline |
Daesung Hi Tech |
BIT Computer |
Daesung Hi and BIT Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daesung Hi and BIT Computer
The main advantage of trading using opposite Daesung Hi and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Hi position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.Daesung Hi vs. Lotte Chilsung Beverage | Daesung Hi vs. Lotte Rental Co | Daesung Hi vs. LG Display Co | Daesung Hi vs. Samsung Publishing Co |
BIT Computer vs. Hanmi Semiconductor Co | BIT Computer vs. Golden Bridge Investment | BIT Computer vs. Korea Electronic Certification | BIT Computer vs. E Investment Development |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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