Correlation Between Dongbang Transport and HB Technology
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and HB 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 HB 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 HB Technology TD, you can compare the effects of market volatilities on Dongbang Transport and HB 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and HB Technology.
Diversification Opportunities for Dongbang Transport and HB Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbang and 078150 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and HB Technology go up and down completely randomly.
Pair Corralation between Dongbang Transport and HB Technology
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 14.59 times less return on investment than HB Technology. But when comparing it to its historical volatility, Dongbang Transport Logistics is 2.8 times less risky than HB Technology. It trades about 0.07 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 194,700 in HB Technology TD on October 30, 2024 and sell it today you would earn a total of 53,800 from holding HB Technology TD or generate 27.63% 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. HB Technology TD
Performance |
| Timeline |
| Dongbang Transport |
| HB Technology TD |
Dongbang Transport and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and HB Technology
The main advantage of trading using opposite Dongbang Transport and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, HB 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 HB Technology will offset losses from the drop in HB Technology's long position.| Dongbang Transport vs. KB Financial Group | Dongbang Transport vs. Shinhan Financial Group | Dongbang Transport vs. Hana Financial | Dongbang Transport vs. Woori Financial Group |
| HB Technology vs. Finebesteel | HB Technology vs. CJ Seafood Corp | HB Technology vs. Samyang Foods Co | HB Technology vs. Seah Steel Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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