Correlation Between Dongbang Transport and Korea Refract
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Korea Refract 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 Korea Refract 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 Korea Refract, you can compare the effects of market volatilities on Dongbang Transport and Korea Refract 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 Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Korea Refract.
Diversification Opportunities for Dongbang Transport and Korea Refract
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and Korea is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract 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 Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Korea Refract go up and down completely randomly.
Pair Corralation between Dongbang Transport and Korea Refract
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 2.24 times more return on investment than Korea Refract. However, Dongbang Transport is 2.24 times more volatile than Korea Refract. It trades about -0.04 of its potential returns per unit of risk. Korea Refract is currently generating about -0.11 per unit of risk. If you would invest 307,500 in Dongbang Transport Logistics on September 3, 2024 and sell it today you would lose (80,000) from holding Dongbang Transport Logistics or give up 26.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Korea Refract
Performance |
| Timeline |
| Dongbang Transport |
| Korea Refract |
Dongbang Transport and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Korea Refract
The main advantage of trading using opposite Dongbang Transport and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Korea Refract 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 Korea Refract will offset losses from the drop in Korea Refract's long position.| Dongbang Transport vs. AptaBio Therapeutics | Dongbang Transport vs. Daewoo SBI SPAC | Dongbang Transport vs. Dream Security co | Dongbang Transport vs. Microfriend |
| Korea Refract vs. Dongbang Transport Logistics | Korea Refract vs. Samwha Electronics Co | Korea Refract vs. Anam Electronics Co | Korea Refract vs. Sungdo Engineering Construction |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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