Correlation Between Dongwon Ind and IL Science
Can any of the company-specific risk be diversified away by investing in both Dongwon Ind and IL Science 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 IL Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon Ind and IL Science Co, you can compare the effects of market volatilities on Dongwon Ind and IL Science 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 IL Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Ind and IL Science.
Diversification Opportunities for Dongwon Ind and IL Science
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongwon and 307180 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Ind and IL Science Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IL Science 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 IL Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IL Science has no effect on the direction of Dongwon Ind i.e., Dongwon Ind and IL Science go up and down completely randomly.
Pair Corralation between Dongwon Ind and IL Science
Assuming the 90 days trading horizon Dongwon Ind is expected to generate 43.53 times less return on investment than IL Science. But when comparing it to its historical volatility, Dongwon Ind is 1.37 times less risky than IL Science. It trades about 0.01 of its potential returns per unit of risk. IL Science Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 264,000 in IL Science Co on October 20, 2024 and sell it today you would earn a total of 27,500 from holding IL Science Co or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Ind vs. IL Science Co
Performance |
| Timeline |
| Dongwon Ind |
| IL Science |
Dongwon Ind and IL Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Ind and IL Science
The main advantage of trading using opposite Dongwon Ind and IL Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Ind position performs unexpectedly, IL Science 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 IL Science will offset losses from the drop in IL Science's long position.| Dongwon Ind vs. Global Standard Technology | Dongwon Ind vs. Eagon Industrial Co | Dongwon Ind vs. Dong A Steel Technology | Dongwon Ind vs. Lee Ku Industrial |
| IL Science vs. Lion Chemtech Co | IL Science vs. Kuk Young GM | IL Science vs. Nature and Environment | IL Science vs. Cheryong Industrial CoLtd |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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