Correlation Between Dongbang Transport and System
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and System 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 System 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 System and Application, you can compare the effects of market volatilities on Dongbang Transport and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and System.
Diversification Opportunities for Dongbang Transport and System
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbang and System is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and System go up and down completely randomly.
Pair Corralation between Dongbang Transport and System
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.13 times more return on investment than System. However, Dongbang Transport is 1.13 times more volatile than System and Application. It trades about 0.0 of its potential returns per unit of risk. System and Application is currently generating about -0.01 per unit of risk. If you would invest 267,500 in Dongbang Transport Logistics on October 27, 2024 and sell it today you would lose (47,500) from holding Dongbang Transport Logistics or give up 17.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. System and Application
Performance |
| Timeline |
| Dongbang Transport |
| System and Application |
Dongbang Transport and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and System
The main advantage of trading using opposite Dongbang Transport and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Dongbang Transport vs. DSC Investment | Dongbang Transport vs. Tamul Multimedia Co | Dongbang Transport vs. Atinum Investment Co | Dongbang Transport vs. MediaZen |
| System vs. Sejong Telecom | System vs. Nable Communications | System vs. PJ Metal Co | System vs. Nice Information Telecommunication |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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