Correlation Between Daishin Balance and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Jeong Moon 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 Balance and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance 1 and Jeong Moon Information, you can compare the effects of market volatilities on Daishin Balance and Jeong Moon 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 Balance with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Jeong Moon.
Diversification Opportunities for Daishin Balance and Jeong Moon
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daishin and Jeong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Daishin Balance 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 Balance 1 are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Daishin Balance i.e., Daishin Balance and Jeong Moon go up and down completely randomly.
Pair Corralation between Daishin Balance and Jeong Moon
Assuming the 90 days trading horizon Daishin Balance 1 is expected to generate 1.33 times more return on investment than Jeong Moon. However, Daishin Balance is 1.33 times more volatile than Jeong Moon Information. It trades about -0.03 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.12 per unit of risk. If you would invest 552,000 in Daishin Balance 1 on September 11, 2024 and sell it today you would lose (33,000) from holding Daishin Balance 1 or give up 5.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Daishin Balance 1 vs. Jeong Moon Information
Performance |
Timeline |
Daishin Balance 1 |
Jeong Moon Information |
Daishin Balance and Jeong Moon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daishin Balance and Jeong Moon
The main advantage of trading using opposite Daishin Balance and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.Daishin Balance vs. JC Chemical Co | Daishin Balance vs. KyungIn Electronics Co | Daishin Balance vs. Dongnam Chemical Co | Daishin Balance vs. Kukdo Chemical Co |
Jeong Moon vs. ECSTELECOM Co | Jeong Moon vs. Korean Air Lines | Jeong Moon vs. Tway Air Co | Jeong Moon vs. Ssangyong Information Communication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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