Correlation Between Dongbang Transport and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Dongbang Ship 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 Dongbang Ship 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 Dongbang Ship Machinery, you can compare the effects of market volatilities on Dongbang Transport and Dongbang Ship 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 Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Dongbang Ship.
Diversification Opportunities for Dongbang Transport and Dongbang Ship
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Dongbang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery 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 Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Dongbang Ship go up and down completely randomly.
Pair Corralation between Dongbang Transport and Dongbang Ship
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 1.3 times less return on investment than Dongbang Ship. But when comparing it to its historical volatility, Dongbang Transport Logistics is 2.8 times less risky than Dongbang Ship. It trades about 0.17 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 304,000 in Dongbang Ship Machinery on October 12, 2024 and sell it today you would earn a total of 14,000 from holding Dongbang Ship Machinery or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Dongbang Transport |
| Dongbang Ship Machinery |
Dongbang Transport and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Dongbang Ship
The main advantage of trading using opposite Dongbang Transport and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Dongbang Transport vs. Sajo Seafood | Dongbang Transport vs. DONGKUK TED METAL | Dongbang Transport vs. Osang Healthcare Co,Ltd | Dongbang Transport vs. Chorokbaem Healthcare Co |
| Dongbang Ship vs. Dongbang Transport Logistics | Dongbang Ship vs. Netmarble Games Corp | Dongbang Ship vs. Echomarketing CoLtd | Dongbang Ship vs. Daishin Information Communications |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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