Correlation Between Dongwon Ind and Itcen
Can any of the company-specific risk be diversified away by investing in both Dongwon Ind and Itcen 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 Itcen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon Ind and Itcen Co, you can compare the effects of market volatilities on Dongwon Ind and Itcen 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 Itcen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Ind and Itcen.
Diversification Opportunities for Dongwon Ind and Itcen
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongwon and Itcen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Ind and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen 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 Itcen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen has no effect on the direction of Dongwon Ind i.e., Dongwon Ind and Itcen go up and down completely randomly.
Pair Corralation between Dongwon Ind and Itcen
Assuming the 90 days trading horizon Dongwon Ind is expected to generate 0.43 times more return on investment than Itcen. However, Dongwon Ind is 2.3 times less risky than Itcen. It trades about -0.05 of its potential returns per unit of risk. Itcen Co is currently generating about -0.12 per unit of risk. If you would invest 3,563,636 in Dongwon Ind on October 17, 2024 and sell it today you would lose (58,636) from holding Dongwon Ind or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Ind vs. Itcen Co
Performance |
| Timeline |
| Dongwon Ind |
| Itcen |
Dongwon Ind and Itcen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Ind and Itcen
The main advantage of trading using opposite Dongwon Ind and Itcen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Ind position performs unexpectedly, Itcen 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 Itcen will offset losses from the drop in Itcen's long position.| Dongwon Ind vs. Sewoon Medical Co | Dongwon Ind vs. Wireless Power Amplifier | Dongwon Ind vs. LG Display Co | Dongwon Ind vs. Asiana Airlines |
| Itcen vs. KMH Hitech Co | Itcen vs. GemVaxKAEL CoLtd | Itcen vs. Bosung Power Technology | Itcen vs. Busan Industrial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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