Correlation Between Dongbang Transport and SH Energy
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and SH Energy 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 Dongbang Transport and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and SH Energy Chemical, you can compare the effects of market volatilities on Dongbang Transport and SH Energy 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 Dongbang Transport with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and SH Energy.
Diversification Opportunities for Dongbang Transport and SH Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongbang and 002360 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and SH Energy go up and down completely randomly.
Pair Corralation between Dongbang Transport and SH Energy
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, Dongbang Transport Logistics is 1.68 times less risky than SH Energy. The stock trades about -0.03 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 50,900 in SH Energy Chemical on September 1, 2024 and sell it today you would earn a total of 1,800 from holding SH Energy Chemical or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. SH Energy Chemical
Performance |
| Timeline |
| Dongbang Transport |
| SH Energy Chemical |
Dongbang Transport and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and SH Energy
The main advantage of trading using opposite Dongbang Transport and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Dongbang Transport vs. Infinitt Healthcare Co | Dongbang Transport vs. LG Household Healthcare | Dongbang Transport vs. Cube Entertainment | Dongbang Transport vs. Digital Multimedia Technology |
| SH Energy vs. Air Busan Co | SH Energy vs. Jeju Air Co | SH Energy vs. Cube Entertainment | SH Energy vs. MEDIANA CoLtd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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