Correlation Between DukSan Neolux and Daishin Balance

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

By analyzing existing cross correlation between DukSan Neolux CoLtd and Daishin Balance No, you can compare the effects of market volatilities on DukSan Neolux 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 DukSan Neolux with a short position of Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DukSan Neolux and Daishin Balance.

Diversification Opportunities for DukSan Neolux and Daishin Balance

0.64

Correlation Coefficient

DukSan Neolux  Daishin Balance

Poor diversification

The 3 months correlation between DukSan and Daishin is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DukSan Neolux CoLtd and Daishin Balance No in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No and DukSan Neolux 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 DukSan Neolux CoLtd 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 No has no effect on the direction of DukSan Neolux i.e., DukSan Neolux and Daishin Balance go up and down completely randomly.

Pair Corralation between DukSan Neolux and Daishin Balance

Assuming the 90 days trading horizon DukSan Neolux CoLtd is expected to generate 1.69 times more return on investment than Daishin Balance. However, DukSan Neolux is 1.69 times more volatile than Daishin Balance No. It trades about 0.13 of its potential returns per unit of risk. Daishin Balance No is currently generating about 0.04 per unit of risk. If you would invest  2,450,000  in DukSan Neolux CoLtd on December 2, 2024 and sell it today you would earn a total of  635,000  from holding DukSan Neolux CoLtd or generate 25.92% return on investment over 90 days.

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

DukSan Neolux CoLtd  vs.  Daishin Balance No

DukSan Neolux CoLtd

Risk-Adjusted Performance

OK

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

Daishin Balance No

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Daishin Balance No are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Daishin Balance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DukSan Neolux and Daishin Balance

The main advantage of trading using opposite DukSan Neolux and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DukSan Neolux 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 DukSan Neolux CoLtd and Daishin Balance No 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..