Correlation Between Korea Shipbuilding and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding 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 Korea Shipbuilding and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Dongil Metal Co, you can compare the effects of market volatilities on Korea Shipbuilding 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 Korea Shipbuilding with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Dongil Metal.
Diversification Opportunities for Korea Shipbuilding and Dongil Metal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Dongil is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Korea Shipbuilding 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 Korea Shipbuilding Offshore 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 Korea Shipbuilding i.e., Korea Shipbuilding and Dongil Metal go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Dongil Metal
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.25 times more return on investment than Dongil Metal. However, Korea Shipbuilding is 1.25 times more volatile than Dongil Metal Co. It trades about 0.18 of its potential returns per unit of risk. Dongil Metal Co is currently generating about 0.1 per unit of risk. If you would invest 19,500,000 in Korea Shipbuilding Offshore on November 4, 2024 and sell it today you would earn a total of 3,700,000 from holding Korea Shipbuilding Offshore or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Dongil Metal Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Dongil Metal |
Korea Shipbuilding and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Dongil Metal
The main advantage of trading using opposite Korea Shipbuilding and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding 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.| Korea Shipbuilding vs. Woori Technology Investment | Korea Shipbuilding vs. Barunson Entertainment Arts | Korea Shipbuilding vs. SAMG Entertainment Co | Korea Shipbuilding vs. SBI Investment KOREA |
| Dongil Metal vs. Seoam Machinery Industry | Dongil Metal vs. KCC Engineering Construction | Dongil Metal vs. Hanshin Construction Co | Dongil Metal vs. KEPCO Engineering Construction |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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