Correlation Between Dongbang Transport and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Dongbang Transport and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Daesung Hi.
Diversification Opportunities for Dongbang Transport and Daesung Hi
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and Daesung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Daesung Hi go up and down completely randomly.
Pair Corralation between Dongbang Transport and Daesung Hi
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.98 times more return on investment than Daesung Hi. However, Dongbang Transport Logistics is 1.02 times less risky than Daesung Hi. It trades about -0.02 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.17 per unit of risk. If you would invest 227,500 in Dongbang Transport Logistics on October 30, 2024 and sell it today you would lose (7,500) from holding Dongbang Transport Logistics or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Daesung Hi Tech Co
Performance |
| Timeline |
| Dongbang Transport |
| Daesung Hi Tech |
Dongbang Transport and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Daesung Hi
The main advantage of trading using opposite Dongbang Transport and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi'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 |
| Daesung Hi vs. E Investment Development | Daesung Hi vs. Woori Technology Investment | Daesung Hi vs. Sangsangin Investment Securities | Daesung Hi vs. RF Materials 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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