Correlation Between Dongbang Transport and SK Holdings
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and SK Holdings 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 SK Holdings 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 SK Holdings Co, you can compare the effects of market volatilities on Dongbang Transport and SK Holdings 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 SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and SK Holdings.
Diversification Opportunities for Dongbang Transport and SK Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongbang and 034730 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings 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 SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and SK Holdings go up and down completely randomly.
Pair Corralation between Dongbang Transport and SK Holdings
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.6 times more return on investment than SK Holdings. However, Dongbang Transport Logistics is 1.67 times less risky than SK Holdings. It trades about 0.22 of its potential returns per unit of risk. SK Holdings Co is currently generating about 0.1 per unit of risk. If you would invest 218,000 in Dongbang Transport Logistics on October 14, 2024 and sell it today you would earn a total of 11,500 from holding Dongbang Transport Logistics or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. SK Holdings Co
Performance |
| Timeline |
| Dongbang Transport |
| SK Holdings |
Dongbang Transport and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and SK Holdings
The main advantage of trading using opposite Dongbang Transport and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, SK Holdings 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 SK Holdings will offset losses from the drop in SK Holdings' long position.| Dongbang Transport vs. Keyang Electric Machinery | Dongbang Transport vs. Miwon Chemicals Co | Dongbang Transport vs. Daeduck Electronics Co | Dongbang Transport vs. Woorim Machinery Co |
| SK Holdings vs. Dongbang Transport Logistics | SK Holdings vs. Camus Engineering Construction | SK Holdings vs. Dongwoo Farm To | SK Holdings vs. Nam Hwa 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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