Correlation Between Dongbang Transport and HYUNDAI BIOLAND
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND 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 HYUNDAI BIOLAND CoLtd, you can compare the effects of market volatilities on Dongbang Transport and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and HYUNDAI BIOLAND.
Diversification Opportunities for Dongbang Transport and HYUNDAI BIOLAND
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongbang and HYUNDAI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and HYUNDAI BIOLAND CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI BIOLAND 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 HYUNDAI BIOLAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI BIOLAND CoLtd has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and HYUNDAI BIOLAND go up and down completely randomly.
Pair Corralation between Dongbang Transport and HYUNDAI BIOLAND
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.4 times more return on investment than HYUNDAI BIOLAND. However, Dongbang Transport is 1.4 times more volatile than HYUNDAI BIOLAND CoLtd. It trades about 0.02 of its potential returns per unit of risk. HYUNDAI BIOLAND CoLtd is currently generating about 0.0 per unit of risk. If you would invest 207,500 in Dongbang Transport Logistics on September 14, 2024 and sell it today you would earn a total of 8,500 from holding Dongbang Transport Logistics or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. HYUNDAI BIOLAND CoLtd
Performance |
| Timeline |
| Dongbang Transport |
| HYUNDAI BIOLAND CoLtd |
Dongbang Transport and HYUNDAI BIOLAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and HYUNDAI BIOLAND
The main advantage of trading using opposite Dongbang Transport and HYUNDAI BIOLAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, HYUNDAI BIOLAND 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 HYUNDAI BIOLAND will offset losses from the drop in HYUNDAI BIOLAND's long position.| Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. SK Hynix | Dongbang Transport vs. POSCO Holdings |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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