Correlation Between FOODWELL and Dongwon Ind
Can any of the company-specific risk be diversified away by investing in both FOODWELL and Dongwon Ind 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 FOODWELL and Dongwon Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Dongwon Ind, you can compare the effects of market volatilities on FOODWELL and Dongwon Ind 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 FOODWELL with a short position of Dongwon Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Dongwon Ind.
Diversification Opportunities for FOODWELL and Dongwon Ind
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FOODWELL and Dongwon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Dongwon Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Ind and FOODWELL 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 FOODWELL Co are associated (or correlated) with Dongwon Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Ind has no effect on the direction of FOODWELL i.e., FOODWELL and Dongwon Ind go up and down completely randomly.
Pair Corralation between FOODWELL and Dongwon Ind
Assuming the 90 days trading horizon FOODWELL Co is expected to generate 1.1 times more return on investment than Dongwon Ind. However, FOODWELL is 1.1 times more volatile than Dongwon Ind. It trades about 0.03 of its potential returns per unit of risk. Dongwon Ind is currently generating about 0.0 per unit of risk. If you would invest 476,949 in FOODWELL Co on November 8, 2024 and sell it today you would earn a total of 51,051 from holding FOODWELL Co or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
FOODWELL Co vs. Dongwon Ind
Performance |
| Timeline |
| FOODWELL |
| Dongwon Ind |
FOODWELL and Dongwon Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and Dongwon Ind
The main advantage of trading using opposite FOODWELL and Dongwon Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, Dongwon Ind 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 Ind will offset losses from the drop in Dongwon Ind's long position.| FOODWELL vs. Tway Air Co | FOODWELL vs. EBEST Investment Securities | FOODWELL vs. LG Household Healthcare | FOODWELL vs. LG Display Co |
| Dongwon Ind vs. GS Engineering Construction | Dongwon Ind vs. Dongkuk Structures Construction | Dongwon Ind vs. Tuksu Engineering ConstructionLtd | Dongwon Ind vs. Seohee Construction 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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