Correlation Between Dongbang Transport and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial Co, you can compare the effects of market volatilities on Dongbang Transport and Eagon Industrial 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Eagon Industrial.
Diversification Opportunities for Dongbang Transport and Eagon Industrial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongbang and Eagon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Eagon Industrial go up and down completely randomly.
Pair Corralation between Dongbang Transport and Eagon Industrial
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 10.42 times less return on investment than Eagon Industrial. But when comparing it to its historical volatility, Dongbang Transport Logistics is 5.82 times less risky than Eagon Industrial. It trades about 0.07 of its potential returns per unit of risk. Eagon Industrial Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 518,000 in Eagon Industrial Co on October 31, 2024 and sell it today you would earn a total of 75,000 from holding Eagon Industrial Co or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Eagon Industrial Co
Performance |
| Timeline |
| Dongbang Transport |
| Eagon Industrial |
Dongbang Transport and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Eagon Industrial
The main advantage of trading using opposite Dongbang Transport and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Dongbang Transport vs. SEOJEON ELECTRIC MACHINERY | Dongbang Transport vs. Iljin Display | Dongbang Transport vs. Daewoo Engineering Construction | Dongbang Transport vs. Shinsegae Engineering Construction |
| Eagon Industrial vs. LG Chemicals | Eagon Industrial vs. Settlebank | Eagon Industrial vs. KakaoBank Corp | Eagon Industrial vs. SK Chemicals Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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