Correlation Between V One and Daelim Industrial

Can any of the company-specific risk be diversified away by investing in both V One and Daelim Industrial 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 V One and Daelim Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between V One Tech Co and Daelim Industrial Co, you can compare the effects of market volatilities on V One and Daelim Industrial 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 V One with a short position of Daelim Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of V One and Daelim Industrial.

Diversification Opportunities for V One and Daelim Industrial

-0.24

Correlation Coefficient

V One  Daelim Industrial

Very good diversification

The 3 months correlation between 251630 and Daelim is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding V One Tech Co and Daelim Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Industrial and V One 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 V One Tech Co are associated (or correlated) with Daelim Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Industrial has no effect on the direction of V One i.e., V One and Daelim Industrial go up and down completely randomly.

Pair Corralation between V One and Daelim Industrial

Assuming the 90 days trading horizon V One Tech Co is expected to generate 2.56 times more return on investment than Daelim Industrial. However, V One is 2.56 times more volatile than Daelim Industrial Co. It trades about 0.04 of its potential returns per unit of risk. Daelim Industrial Co is currently generating about -0.05 per unit of risk. If you would invest  396,000  in V One Tech Co on December 29, 2024 and sell it today you would earn a total of  15,000  from holding V One Tech Co or generate 3.79% return on investment over 90 days.

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

V One Tech Co  vs.  Daelim Industrial Co

V One Tech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in V One Tech Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V One may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Daelim Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Daelim Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Daelim Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with V One and Daelim Industrial

The main advantage of trading using opposite V One and Daelim Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V One position performs unexpectedly, Daelim Industrial 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 Daelim Industrial will offset losses from the drop in Daelim Industrial's long position.

The idea behind V One Tech Co and Daelim Industrial Co 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.