Correlation Between Dongbang Transport and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on Dongbang Transport and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Sambo Corrugated.
Diversification Opportunities for Dongbang Transport and Sambo Corrugated
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Sambo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Dongbang Transport and Sambo Corrugated
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 3.31 times more return on investment than Sambo Corrugated. However, Dongbang Transport is 3.31 times more volatile than Sambo Corrugated Board. It trades about 0.01 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.04 per unit of risk. If you would invest 267,000 in Dongbang Transport Logistics on October 25, 2024 and sell it today you would lose (38,500) from holding Dongbang Transport Logistics or give up 14.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Sambo Corrugated Board
Performance |
| Timeline |
| Dongbang Transport |
| Sambo Corrugated Board |
Dongbang Transport and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Sambo Corrugated
The main advantage of trading using opposite Dongbang Transport and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| Dongbang Transport vs. KB Financial Group | Dongbang Transport vs. Shinhan Financial Group | Dongbang Transport vs. Hana Financial | Dongbang Transport vs. Woori Financial Group |
| Sambo Corrugated vs. KyungIn Electronics Co | Sambo Corrugated vs. Jahwa Electronics Co | Sambo Corrugated vs. DB Financial Investment | Sambo Corrugated vs. Samsung Electronics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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