Correlation Between Dongbang Transport and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on Dongbang Transport and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Digital Imaging.
Diversification Opportunities for Dongbang Transport and Digital Imaging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Digital is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Digital Imaging go up and down completely randomly.
Pair Corralation between Dongbang Transport and Digital Imaging
Assuming the 90 days trading horizon Dongbang Transport is expected to generate 6.68 times less return on investment than Digital Imaging. But when comparing it to its historical volatility, Dongbang Transport Logistics is 1.42 times less risky than Digital Imaging. It trades about 0.01 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 830,837 in Digital Imaging Technology on October 29, 2024 and sell it today you would earn a total of 991,163 from holding Digital Imaging Technology or generate 119.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Digital Imaging Technology
Performance |
| Timeline |
| Dongbang Transport |
| Digital Imaging Tech |
Dongbang Transport and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Digital Imaging
The main advantage of trading using opposite Dongbang Transport and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging'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 |
| Digital Imaging vs. KakaoBank Corp | Digital Imaging vs. Korea Information Engineering | Digital Imaging vs. Koryo Credit Information | Digital Imaging vs. Jb Financial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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