Correlation Between Daishin Balance and E Mart

Can any of the company-specific risk be diversified away by investing in both Daishin Balance and E Mart 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 E Mart 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 E Mart, you can compare the effects of market volatilities on Daishin Balance and E Mart 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 E Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and E Mart.

Diversification Opportunities for Daishin Balance and E Mart

-0.1

Correlation Coefficient

Daishin Balance  E Mart

Good diversification

The 3 months correlation between Daishin and 139480 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and E Mart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Mart 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 E Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Mart has no effect on the direction of Daishin Balance i.e., Daishin Balance and E Mart go up and down completely randomly.

Pair Corralation between Daishin Balance and E Mart

Assuming the 90 days trading horizon Daishin Balance No8 is expected to under-perform the E Mart. In addition to that, Daishin Balance is 1.3 times more volatile than E Mart. It trades about 0.0 of its total potential returns per unit of risk. E Mart is currently generating about 0.05 per unit of volatility. If you would invest  6,280,000  in E Mart on October 23, 2024 and sell it today you would earn a total of  360,000  from holding E Mart or generate 5.73% return on investment over 90 days.

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

Daishin Balance No8  vs.  E Mart

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 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.

E Mart

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in E Mart are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, E Mart may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Daishin Balance and E Mart

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

The idea behind Daishin Balance No8 and E Mart 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .