Correlation Between Perfect Corp and DHI

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

By analyzing existing cross correlation between Perfect Corp and DHI Group, you can compare the effects of market volatilities on Perfect Corp and DHI 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 Perfect Corp with a short position of DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perfect Corp and DHI.

Diversification Opportunities for Perfect Corp and DHI

-0.04

Correlation Coefficient

Perfect Corp  DHI

Good diversification

The 3 months correlation between Perfect and DHI is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Perfect Corp and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and Perfect Corp 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 Perfect Corp are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Perfect Corp i.e., Perfect Corp and DHI go up and down completely randomly.

Pair Corralation between Perfect Corp and DHI

Given the investment horizon of 90 days Perfect Corp is expected to generate 1.37 times more return on investment than DHI. However, Perfect Corp is 1.37 times more volatile than DHI Group. It trades about 0.0 of its potential returns per unit of risk. DHI Group is currently generating about -0.01 per unit of risk. If you would invest  218.00  in Perfect Corp on December 19, 2024 and sell it today you would lose (35.00) from holding Perfect Corp or give up 16.06% of portfolio value over 90 days.

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

Perfect Corp  vs.  DHI Group

Perfect Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perfect Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perfect Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

DHI Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days DHI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, DHI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Perfect Corp and DHI

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

The idea behind Perfect Corp and DHI Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.