Correlation Between Daelim Trading and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Dongil Metal 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 Daelim Trading and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Dongil Metal Co, you can compare the effects of market volatilities on Daelim Trading and Dongil Metal 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 Daelim Trading with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Dongil Metal.
Diversification Opportunities for Daelim Trading and Dongil Metal
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daelim and Dongil is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Daelim Trading i.e., Daelim Trading and Dongil Metal go up and down completely randomly.
Pair Corralation between Daelim Trading and Dongil Metal
Assuming the 90 days trading horizon Daelim Trading Co is expected to under-perform the Dongil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Daelim Trading Co is 1.5 times less risky than Dongil Metal. The stock trades about -0.05 of its potential returns per unit of risk. The Dongil Metal Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 768,701 in Dongil Metal Co on October 25, 2024 and sell it today you would earn a total of 136,299 from holding Dongil Metal Co or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Dongil Metal Co
Performance |
| Timeline |
| Daelim Trading |
| Dongil Metal |
Daelim Trading and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Dongil Metal
The main advantage of trading using opposite Daelim Trading and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Daelim Trading vs. LG Household Healthcare | Daelim Trading vs. Green Cross Medical | Daelim Trading vs. Seoul Electronics Telecom | Daelim Trading vs. Samyoung Electronics Co |
| Dongil Metal vs. Samlip General Foods | Dongil Metal vs. Samyang Foods Co | Dongil Metal vs. Sempio Foods Co | Dongil Metal vs. CJ Seafood Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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