Correlation Between Dongbang Transport and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on Dongbang Transport and Cuckoo Electronics 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Cuckoo Electronics.
Diversification Opportunities for Dongbang Transport and Cuckoo Electronics
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongbang and Cuckoo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Dongbang Transport and Cuckoo Electronics
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.78 times more return on investment than Cuckoo Electronics. However, Dongbang Transport Logistics is 1.28 times less risky than Cuckoo Electronics. It trades about 0.14 of its potential returns per unit of risk. Cuckoo Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 223,000 in Dongbang Transport Logistics on October 15, 2024 and sell it today you would earn a total of 6,500 from holding Dongbang Transport Logistics or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Dongbang Transport |
| Cuckoo Electronics |
Dongbang Transport and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Cuckoo Electronics
The main advantage of trading using opposite Dongbang Transport and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Dongbang Transport vs. Dongil Metal Co | Dongbang Transport vs. TJ media Co | Dongbang Transport vs. Next Entertainment World | Dongbang Transport vs. Echomarketing CoLtd |
| Cuckoo Electronics vs. KT Submarine Telecom | Cuckoo Electronics vs. JC Chemical Co | Cuckoo Electronics vs. KPX Green Chemical | Cuckoo Electronics vs. Nice Information Telecommunication |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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