Correlation Between Dongwon Ind and CJ Cheiljedang
Can any of the company-specific risk be diversified away by investing in both Dongwon Ind and CJ Cheiljedang 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 Dongwon Ind and CJ Cheiljedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon Ind and CJ Cheiljedang, you can compare the effects of market volatilities on Dongwon Ind and CJ Cheiljedang 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 Dongwon Ind with a short position of CJ Cheiljedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Ind and CJ Cheiljedang.
Diversification Opportunities for Dongwon Ind and CJ Cheiljedang
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwon and 097950 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Ind and CJ Cheiljedang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ Cheiljedang and Dongwon Ind 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 Dongwon Ind are associated (or correlated) with CJ Cheiljedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ Cheiljedang has no effect on the direction of Dongwon Ind i.e., Dongwon Ind and CJ Cheiljedang go up and down completely randomly.
Pair Corralation between Dongwon Ind and CJ Cheiljedang
Assuming the 90 days trading horizon Dongwon Ind is expected to generate 0.83 times more return on investment than CJ Cheiljedang. However, Dongwon Ind is 1.2 times less risky than CJ Cheiljedang. It trades about 0.14 of its potential returns per unit of risk. CJ Cheiljedang is currently generating about -0.15 per unit of risk. If you would invest 2,777,273 in Dongwon Ind on November 2, 2024 and sell it today you would earn a total of 642,727 from holding Dongwon Ind or generate 23.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Ind vs. CJ Cheiljedang
Performance |
| Timeline |
| Dongwon Ind |
| CJ Cheiljedang |
Dongwon Ind and CJ Cheiljedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Ind and CJ Cheiljedang
The main advantage of trading using opposite Dongwon Ind and CJ Cheiljedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Ind position performs unexpectedly, CJ Cheiljedang 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 CJ Cheiljedang will offset losses from the drop in CJ Cheiljedang's long position.| Dongwon Ind vs. CU Medical Systems | Dongwon Ind vs. Hyundai Home Shopping | Dongwon Ind vs. GS Retail Co | Dongwon Ind vs. SH Energy Chemical |
| CJ Cheiljedang vs. Busan Industrial Co | CJ Cheiljedang vs. Busan Ind | CJ Cheiljedang vs. RPBio Inc | CJ Cheiljedang vs. Finebesteel |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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