Correlation Between Dongbang Transport and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and AeroSpace Technology 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 AeroSpace Technology 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 AeroSpace Technology of, you can compare the effects of market volatilities on Dongbang Transport and AeroSpace Technology 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and AeroSpace Technology.
Diversification Opportunities for Dongbang Transport and AeroSpace Technology
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbang and AeroSpace is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace Technology 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and AeroSpace Technology go up and down completely randomly.
Pair Corralation between Dongbang Transport and AeroSpace Technology
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.61 times more return on investment than AeroSpace Technology. However, Dongbang Transport Logistics is 1.64 times less risky than AeroSpace Technology. It trades about 0.01 of its potential returns per unit of risk. AeroSpace Technology of is currently generating about -0.04 per unit of risk. If you would invest 234,000 in Dongbang Transport Logistics on October 29, 2024 and sell it today you would lose (14,000) from holding Dongbang Transport Logistics or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.27% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. AeroSpace Technology of
Performance |
| Timeline |
| Dongbang Transport |
| AeroSpace Technology |
Dongbang Transport and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and AeroSpace Technology
The main advantage of trading using opposite Dongbang Transport and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, AeroSpace Technology 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology's long position.| Dongbang Transport vs. Daewon Media Co | Dongbang Transport vs. KT Submarine Telecom | Dongbang Transport vs. Digital Power Communications | Dongbang Transport vs. Next Entertainment World |
| AeroSpace Technology vs. Samsung Electronics Co | AeroSpace Technology vs. Samsung Electronics Co | AeroSpace Technology vs. KB Financial Group | AeroSpace Technology vs. Shinhan Financial Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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