Correlation Between Dongbang Transport and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Sangsin Energy 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 Sangsin Energy 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 Sangsin Energy Display, you can compare the effects of market volatilities on Dongbang Transport and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Sangsin Energy.
Diversification Opportunities for Dongbang Transport and Sangsin Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongbang and Sangsin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Sangsin Energy go up and down completely randomly.
Pair Corralation between Dongbang Transport and Sangsin Energy
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.8 times more return on investment than Sangsin Energy. However, Dongbang Transport Logistics is 1.25 times less risky than Sangsin Energy. It trades about -0.03 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.48 per unit of risk. If you would invest 231,500 in Dongbang Transport Logistics on September 1, 2024 and sell it today you would lose (4,000) from holding Dongbang Transport Logistics or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Sangsin Energy Display
Performance |
| Timeline |
| Dongbang Transport |
| Sangsin Energy Display |
Dongbang Transport and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Sangsin Energy
The main advantage of trading using opposite Dongbang Transport and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Dongbang Transport vs. Infinitt Healthcare Co | Dongbang Transport vs. LG Household Healthcare | Dongbang Transport vs. Cube Entertainment | Dongbang Transport vs. Digital Multimedia Technology |
| Sangsin Energy vs. Korea New Network | Sangsin Energy vs. ICD Co | Sangsin Energy vs. DYPNF CoLtd | Sangsin Energy vs. Busan Industrial Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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