Correlation Between Daishin Balance and Curo Holdings

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

By analyzing existing cross correlation between Daishin Balance No8 and Curo Holdings Co, you can compare the effects of market volatilities on Daishin Balance and Curo Holdings 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 Curo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Curo Holdings.

Diversification Opportunities for Daishin Balance and Curo Holdings

-0.09

Correlation Coefficient

Daishin Balance  Curo Holdings

Good diversification

The 3 months correlation between Daishin and Curo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and Curo Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curo Holdings 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 No8 are associated (or correlated) with Curo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curo Holdings has no effect on the direction of Daishin Balance i.e., Daishin Balance and Curo Holdings go up and down completely randomly.

Pair Corralation between Daishin Balance and Curo Holdings

Assuming the 90 days trading horizon Daishin Balance No8 is expected to generate 0.97 times more return on investment than Curo Holdings. However, Daishin Balance No8 is 1.03 times less risky than Curo Holdings. It trades about -0.06 of its potential returns per unit of risk. Curo Holdings Co is currently generating about -0.2 per unit of risk. If you would invest  838,000  in Daishin Balance No8 on October 9, 2024 and sell it today you would lose (308,000) from holding Daishin Balance No8 or give up 36.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.38%
Values	Daily Returns

Daishin Balance No8  vs.  Curo Holdings Co

Daishin Balance No8

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daishin Balance No8 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Curo Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curo Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Daishin Balance and Curo Holdings

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

The idea behind Daishin Balance No8 and Curo Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.