Correlation Between Dongbang Transport and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Heungkuk Metaltech 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 Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Dongbang Transport and Heungkuk Metaltech 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 Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Heungkuk Metaltech.
Diversification Opportunities for Dongbang Transport and Heungkuk Metaltech
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Heungkuk is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Dongbang Transport and Heungkuk Metaltech
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.0 times more return on investment than Heungkuk Metaltech. However, Dongbang Transport is 1.0 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.12 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.09 per unit of risk. If you would invest 213,500 in Dongbang Transport Logistics on October 28, 2024 and sell it today you would earn a total of 6,500 from holding Dongbang Transport Logistics or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Dongbang Transport |
| Heungkuk Metaltech CoLtd |
Dongbang Transport and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Heungkuk Metaltech
The main advantage of trading using opposite Dongbang Transport and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Dongbang Transport vs. Daewon Media Co | Dongbang Transport vs. KT Submarine Telecom | Dongbang Transport vs. Digital Power Communications | Dongbang Transport vs. Next Entertainment World |
| Heungkuk Metaltech vs. Bosung Power Technology | Heungkuk Metaltech vs. Lotte Rental Co | Heungkuk Metaltech vs. Narae Nanotech Corp | Heungkuk Metaltech vs. RFTech 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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