Correlation Between Dongwon System and LEADCORP
Can any of the company-specific risk be diversified away by investing in both Dongwon System and LEADCORP 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 LEADCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and The LEADCORP, you can compare the effects of market volatilities on Dongwon System and LEADCORP 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 LEADCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and LEADCORP.
Diversification Opportunities for Dongwon System and LEADCORP
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongwon and LEADCORP is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and The LEADCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEADCORP 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 LEADCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEADCORP has no effect on the direction of Dongwon System i.e., Dongwon System and LEADCORP go up and down completely randomly.
Pair Corralation between Dongwon System and LEADCORP
Assuming the 90 days trading horizon Dongwon System is expected to generate 2.71 times more return on investment than LEADCORP. However, Dongwon System is 2.71 times more volatile than The LEADCORP. It trades about 0.11 of its potential returns per unit of risk. The LEADCORP is currently generating about 0.24 per unit of risk. If you would invest 3,795,000 in Dongwon System on November 27, 2024 and sell it today you would earn a total of 175,000 from holding Dongwon System or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. The LEADCORP
Performance |
| Timeline |
| Dongwon System |
| LEADCORP |
Dongwon System and LEADCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and LEADCORP
The main advantage of trading using opposite Dongwon System and LEADCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, LEADCORP 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 LEADCORP will offset losses from the drop in LEADCORP's long position.| Dongwon System vs. DB Financial Investment | Dongwon System vs. KakaoBank Corp | Dongwon System vs. Shinhan Inverse Silver | Dongwon System vs. DoubleU Games Co |
| LEADCORP vs. Vitzro Tech Co | LEADCORP vs. RFTech Co | LEADCORP vs. Hwangkum Steel Technology | LEADCORP vs. Amogreentech 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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