Correlation Between Husteel and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Husteel and Dongsin Engineering 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 Husteel and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and Dongsin Engineering Construction, you can compare the effects of market volatilities on Husteel and Dongsin Engineering 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 Husteel with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and Dongsin Engineering.
Diversification Opportunities for Husteel and Dongsin Engineering
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Husteel and Dongsin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Husteel 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 Husteel are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Husteel i.e., Husteel and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Husteel and Dongsin Engineering
Assuming the 90 days trading horizon Husteel is expected to under-perform the Dongsin Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Husteel is 6.11 times less risky than Dongsin Engineering. The stock trades about -0.11 of its potential returns per unit of risk. The Dongsin Engineering Construction is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,375,000 in Dongsin Engineering Construction on September 13, 2024 and sell it today you would earn a total of 4,205,000 from holding Dongsin Engineering Construction or generate 177.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Husteel |
| Dongsin Engineering |
Husteel and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and Dongsin Engineering
The main advantage of trading using opposite Husteel and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| Husteel vs. LG Chemicals | Husteel vs. POSCO Holdings | Husteel vs. Hanwha Solutions | Husteel vs. Lotte Chemical Corp |
| Dongsin Engineering vs. Naver | Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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