Correlation Between Dongwon System and Insung Information
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Insung Information 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 Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and Insung Information Co, you can compare the effects of market volatilities on Dongwon System and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Insung Information.
Diversification Opportunities for Dongwon System and Insung Information
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongwon and Insung is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Dongwon System i.e., Dongwon System and Insung Information go up and down completely randomly.
Pair Corralation between Dongwon System and Insung Information
Assuming the 90 days trading horizon Dongwon System is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, Dongwon System is 1.16 times less risky than Insung Information. The stock trades about -0.1 of its potential returns per unit of risk. The Insung Information Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 189,200 in Insung Information Co on September 21, 2024 and sell it today you would lose (500.00) from holding Insung Information Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. Insung Information Co
Performance |
| Timeline |
| Dongwon System |
| Insung Information |
Dongwon System and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Insung Information
The main advantage of trading using opposite Dongwon System and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Dongwon System vs. CU Medical Systems | Dongwon System vs. Netmarble Games Corp | Dongwon System vs. Sangsin Energy Display | Dongwon System vs. Aprogen Healthcare Games |
| Insung Information vs. Cube Entertainment | Insung Information vs. Dreamus Company | Insung Information vs. LG Energy Solution | Insung Information 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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