Correlation Between Dongjin Semichem and DongWon Development
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem and DongWon Development 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 Dongjin Semichem and DongWon Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and DongWon Development CoLtd, you can compare the effects of market volatilities on Dongjin Semichem and DongWon Development 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 Dongjin Semichem with a short position of DongWon Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and DongWon Development.
Diversification Opportunities for Dongjin Semichem and DongWon Development
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongjin and DongWon is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem Co and DongWon Development CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DongWon Development CoLtd and Dongjin Semichem 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 Dongjin Semichem Co are associated (or correlated) with DongWon Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DongWon Development CoLtd has no effect on the direction of Dongjin Semichem i.e., Dongjin Semichem and DongWon Development go up and down completely randomly.
Pair Corralation between Dongjin Semichem and DongWon Development
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to generate 2.33 times more return on investment than DongWon Development. However, Dongjin Semichem is 2.33 times more volatile than DongWon Development CoLtd. It trades about -0.01 of its potential returns per unit of risk. DongWon Development CoLtd is currently generating about -0.05 per unit of risk. If you would invest 3,235,424 in Dongjin Semichem Co on August 30, 2024 and sell it today you would lose (955,424) from holding Dongjin Semichem Co or give up 29.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. DongWon Development CoLtd
Performance |
| Timeline |
| Dongjin Semichem |
| DongWon Development CoLtd |
Dongjin Semichem and DongWon Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and DongWon Development
The main advantage of trading using opposite Dongjin Semichem and DongWon Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem position performs unexpectedly, DongWon Development 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 DongWon Development will offset losses from the drop in DongWon Development's long position.| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem vs. LF Co |
| DongWon Development vs. Dongjin Semichem Co | DongWon Development vs. Geumhwa Plant Service | DongWon Development vs. Jinro Distillers Co | DongWon Development vs. CJ ENM |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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