Correlation Between Bosung Power and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Bosung Power and Dongil Technology 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 Bosung Power and Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosung Power Technology and Dongil Technology, you can compare the effects of market volatilities on Bosung Power and Dongil Technology 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 Bosung Power with a short position of Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and Dongil Technology.
Diversification Opportunities for Bosung Power and Dongil Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bosung and Dongil is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology and Bosung Power 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 Bosung Power Technology are associated (or correlated) with Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Bosung Power i.e., Bosung Power and Dongil Technology go up and down completely randomly.
Pair Corralation between Bosung Power and Dongil Technology
Assuming the 90 days trading horizon Bosung Power Technology is expected to under-perform the Dongil Technology. In addition to that, Bosung Power is 3.25 times more volatile than Dongil Technology. It trades about -0.04 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.04 per unit of volatility. If you would invest 1,105,534 in Dongil Technology on October 13, 2024 and sell it today you would lose (74,534) from holding Dongil Technology or give up 6.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosung Power Technology vs. Dongil Technology
Performance |
| Timeline |
| Bosung Power Technology |
| Dongil Technology |
Bosung Power and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and Dongil Technology
The main advantage of trading using opposite Bosung Power and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, Dongil Technology 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 Technology will offset losses from the drop in Dongil Technology's long position.| Bosung Power vs. Iljin Display | Bosung Power vs. Lotte Data Communication | Bosung Power vs. Nice Information Telecommunication | Bosung Power vs. SCI Information Service |
| Dongil Technology vs. KMH Hitech Co | Dongil Technology vs. GemVaxKAEL CoLtd | Dongil Technology vs. Bosung Power Technology | Dongil Technology 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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