Correlation Between Dongwon System and Nuintek CoLtd
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Nuintek CoLtd 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 Nuintek CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and Nuintek CoLtd, you can compare the effects of market volatilities on Dongwon System and Nuintek CoLtd 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 Nuintek CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Nuintek CoLtd.
Diversification Opportunities for Dongwon System and Nuintek CoLtd
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and Nuintek is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Nuintek CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuintek CoLtd 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 Nuintek CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuintek CoLtd has no effect on the direction of Dongwon System i.e., Dongwon System and Nuintek CoLtd go up and down completely randomly.
Pair Corralation between Dongwon System and Nuintek CoLtd
Assuming the 90 days trading horizon Dongwon System is expected to under-perform the Nuintek CoLtd. In addition to that, Dongwon System is 1.85 times more volatile than Nuintek CoLtd. It trades about -0.16 of its total potential returns per unit of risk. Nuintek CoLtd is currently generating about -0.21 per unit of volatility. If you would invest 52,400 in Nuintek CoLtd on September 12, 2024 and sell it today you would lose (4,300) from holding Nuintek CoLtd or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. Nuintek CoLtd
Performance |
| Timeline |
| Dongwon System |
| Nuintek CoLtd |
Dongwon System and Nuintek CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Nuintek CoLtd
The main advantage of trading using opposite Dongwon System and Nuintek CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Nuintek CoLtd 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 Nuintek CoLtd will offset losses from the drop in Nuintek CoLtd's long position.| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Lotte Chemical Corp |
| Nuintek CoLtd vs. Cube Entertainment | Nuintek CoLtd vs. Dreamus Company | Nuintek CoLtd vs. LG Energy Solution | Nuintek CoLtd vs. Dongwon System |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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