Correlation Between Dongbang Transport and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on Dongbang Transport and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Sewoon Medical.
Diversification Opportunities for Dongbang Transport and Sewoon Medical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongbang and Sewoon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Sewoon Medical go up and down completely randomly.
Pair Corralation between Dongbang Transport and Sewoon Medical
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 2.26 times more return on investment than Sewoon Medical. However, Dongbang Transport is 2.26 times more volatile than Sewoon Medical Co. It trades about 0.02 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about 0.0 per unit of risk. If you would invest 216,000 in Dongbang Transport Logistics on October 30, 2024 and sell it today you would earn a total of 4,000 from holding Dongbang Transport Logistics or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Sewoon Medical Co
Performance |
| Timeline |
| Dongbang Transport |
| Sewoon Medical |
Dongbang Transport and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Sewoon Medical
The main advantage of trading using opposite Dongbang Transport and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical'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 |
| Sewoon Medical vs. Youngchang Chemical Co | Sewoon Medical vs. Hyundai Industrial Co | Sewoon Medical vs. Pyung Hwa Industrial | Sewoon Medical vs. Daejung Chemicals Metals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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