Correlation Between GS Engineering and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Dongsin Engineering 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 GS Engineering and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Dongsin Engineering Construction, you can compare the effects of market volatilities on GS Engineering and Dongsin Engineering 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 GS Engineering with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Dongsin Engineering.
Diversification Opportunities for GS Engineering and Dongsin Engineering
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006360 and Dongsin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of GS Engineering i.e., GS Engineering and Dongsin Engineering go up and down completely randomly.
Pair Corralation between GS Engineering and Dongsin Engineering
Assuming the 90 days trading horizon GS Engineering is expected to generate 1.04 times less return on investment than Dongsin Engineering. But when comparing it to its historical volatility, GS Engineering Construction is 1.7 times less risky than Dongsin Engineering. It trades about 0.26 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,330,000 in Dongsin Engineering Construction on November 18, 2024 and sell it today you would earn a total of 430,000 from holding Dongsin Engineering Construction or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| GS Engineering Const |
| Dongsin Engineering |
GS Engineering and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Dongsin Engineering
The main advantage of trading using opposite GS Engineering and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| GS Engineering vs. Nh Investment And | GS Engineering vs. Golden Bridge Investment | GS Engineering vs. Sangsangin Investment Securities | GS Engineering vs. Coloray International Investment |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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