Correlation Between Dongwon System and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Sangsangin Investment 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 Dongwon System and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and Sangsangin Investment Securities, you can compare the effects of market volatilities on Dongwon System and Sangsangin Investment 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 Dongwon System with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Sangsangin Investment.
Diversification Opportunities for Dongwon System and Sangsangin Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and Sangsangin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Dongwon System 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 Dongwon System are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Dongwon System i.e., Dongwon System and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Dongwon System and Sangsangin Investment
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.72 times more return on investment than Sangsangin Investment. However, Dongwon System is 1.72 times more volatile than Sangsangin Investment Securities. It trades about 0.02 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.08 per unit of risk. If you would invest 4,266,554 in Dongwon System on September 1, 2024 and sell it today you would earn a total of 283,446 from holding Dongwon System or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Dongwon System vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Dongwon System |
| Sangsangin Investment |
Dongwon System and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Sangsangin Investment
The main advantage of trading using opposite Dongwon System and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Hyundai Steel |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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