Correlation Between KyungIn Electronics and Dong A
Can any of the company-specific risk be diversified away by investing in both KyungIn Electronics and Dong A 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 KyungIn Electronics and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KyungIn Electronics Co and Dong A Steel Technology, you can compare the effects of market volatilities on KyungIn Electronics and Dong A 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 KyungIn Electronics with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of KyungIn Electronics and Dong A.
Diversification Opportunities for KyungIn Electronics and Dong A
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KyungIn and Dong is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics Co and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel and KyungIn Electronics 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 KyungIn Electronics Co are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of KyungIn Electronics i.e., KyungIn Electronics and Dong A go up and down completely randomly.
Pair Corralation between KyungIn Electronics and Dong A
Assuming the 90 days trading horizon KyungIn Electronics Co is expected to generate 0.82 times more return on investment than Dong A. However, KyungIn Electronics Co is 1.22 times less risky than Dong A. It trades about -0.01 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about -0.02 per unit of risk. If you would invest 2,260,636 in KyungIn Electronics Co on November 3, 2024 and sell it today you would lose (300,636) from holding KyungIn Electronics Co or give up 13.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KyungIn Electronics Co vs. Dong A Steel Technology
Performance |
| Timeline |
| KyungIn Electronics |
| Dong A Steel |
KyungIn Electronics and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KyungIn Electronics and Dong A
The main advantage of trading using opposite KyungIn Electronics and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KyungIn Electronics position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| KyungIn Electronics vs. Wireless Power Amplifier | KyungIn Electronics vs. Worldex Industry Trading | KyungIn Electronics vs. Golden Bridge Investment | KyungIn Electronics vs. Stic Investments |
| Dong A vs. E Investment Development | Dong A vs. Shinhan Inverse Copper | Dong A vs. Leaders Technology Investment | Dong A vs. SBI Investment KOREA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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