Correlation Between Dongbang Transport and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Dongbang Transport and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Daishin Information.
Diversification Opportunities for Dongbang Transport and Daishin Information
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Daishin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Daishin Information go up and down completely randomly.
Pair Corralation between Dongbang Transport and Daishin Information
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 1.46 times less return on investment than Daishin Information. But when comparing it to its historical volatility, Dongbang Transport Logistics is 5.32 times less risky than Daishin Information. It trades about 0.17 of its potential returns per unit of risk. Daishin Information Communications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 104,200 in Daishin Information Communications on October 12, 2024 and sell it today you would earn a total of 2,300 from holding Daishin Information Communications or generate 2.21% 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. Daishin Information Communicat
Performance |
| Timeline |
| Dongbang Transport |
| Daishin Information |
Dongbang Transport and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Daishin Information
The main advantage of trading using opposite Dongbang Transport and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Dongbang Transport vs. Sajo Seafood | Dongbang Transport vs. DONGKUK TED METAL | Dongbang Transport vs. Osang Healthcare Co,Ltd | Dongbang Transport vs. Chorokbaem Healthcare Co |
| Daishin Information vs. Eagon Industrial Co | Daishin Information vs. Seoyon Topmetal Co | Daishin Information vs. Daejung Chemicals Metals | Daishin Information vs. Youngsin Metal Industrial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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