Correlation Between Dongbang Transport and Korea Information
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Korea 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 Korea 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 Korea Information Communications, you can compare the effects of market volatilities on Dongbang Transport and Korea 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Korea Information.
Diversification Opportunities for Dongbang Transport and Korea Information
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbang and Korea is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Korea Information go up and down completely randomly.
Pair Corralation between Dongbang Transport and Korea Information
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.3 times more return on investment than Korea Information. However, Dongbang Transport is 1.3 times more volatile than Korea Information Communications. It trades about 0.26 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.2 per unit of risk. If you would invest 218,000 in Dongbang Transport Logistics on October 22, 2024 and sell it today you would earn a total of 12,500 from holding Dongbang Transport Logistics or generate 5.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongbang Transport Logistics vs. Korea Information Communicatio
Performance |
Timeline |
Dongbang Transport |
Korea Information |
Dongbang Transport and Korea Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongbang Transport and Korea Information
The main advantage of trading using opposite Dongbang Transport and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Korea 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 Korea Information will offset losses from the drop in Korea Information's long position.Dongbang Transport vs. Seoul Electronics Telecom | Dongbang Transport vs. Playgram Co | Dongbang Transport vs. Okins Electronics Co | Dongbang Transport vs. Samyoung Electronics Co |
Korea Information vs. Nh Investment And | Korea Information vs. DSC Investment | Korea Information vs. Green Cross Medical | Korea Information vs. Korean Drug 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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