Correlation Between Dongbang Transport and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Hanil Chemical 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 Hanil Chemical 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 Hanil Chemical Ind, you can compare the effects of market volatilities on Dongbang Transport and Hanil Chemical 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 Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Hanil Chemical.
Diversification Opportunities for Dongbang Transport and Hanil Chemical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbang and Hanil is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind 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 Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Hanil Chemical go up and down completely randomly.
Pair Corralation between Dongbang Transport and Hanil Chemical
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.76 times more return on investment than Hanil Chemical. However, Dongbang Transport Logistics is 1.31 times less risky than Hanil Chemical. It trades about 0.3 of its potential returns per unit of risk. Hanil Chemical Ind is currently generating about 0.14 per unit of risk. If you would invest 204,000 in Dongbang Transport Logistics on October 11, 2024 and sell it today you would earn a total of 24,500 from holding Dongbang Transport Logistics or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Hanil Chemical Ind
Performance |
| Timeline |
| Dongbang Transport |
| Hanil Chemical Ind |
Dongbang Transport and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Hanil Chemical
The main advantage of trading using opposite Dongbang Transport and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| Dongbang Transport vs. DB Financial Investment | Dongbang Transport vs. Kukdo Chemical Co | Dongbang Transport vs. Sangsangin Investment Securities | Dongbang Transport vs. Samyung Trading Co |
| Hanil Chemical vs. Genie Music | Hanil Chemical vs. GS Retail Co | Hanil Chemical vs. Duksan Hi Metal | Hanil Chemical vs. Dongbang Transport Logistics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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