Correlation Between Dongwon System and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both Dongwon System and SFA Semicon 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 SFA Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and SFA Semicon Co, you can compare the effects of market volatilities on Dongwon System and SFA Semicon 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 SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and SFA Semicon.
Diversification Opportunities for Dongwon System and SFA Semicon
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongwon and SFA is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon 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 SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of Dongwon System i.e., Dongwon System and SFA Semicon go up and down completely randomly.
Pair Corralation between Dongwon System and SFA Semicon
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.02 times more return on investment than SFA Semicon. However, Dongwon System is 1.02 times more volatile than SFA Semicon Co. It trades about 0.02 of its potential returns per unit of risk. SFA Semicon Co is currently generating about 0.0 per unit of risk. If you would invest 4,109,749 in Dongwon System on September 14, 2024 and sell it today you would earn a total of 200,251 from holding Dongwon System or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dongwon System vs. SFA Semicon Co
Performance |
| Timeline |
| Dongwon System |
| SFA Semicon |
Dongwon System and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and SFA Semicon
The main advantage of trading using opposite Dongwon System and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon's long position.| Dongwon System vs. DSC Investment | Dongwon System vs. Jeju Air Co | Dongwon System vs. Woori Technology Investment | Dongwon System vs. CU Medical Systems |
| SFA Semicon vs. Cube Entertainment | SFA Semicon vs. Dreamus Company | SFA Semicon vs. LG Energy Solution | SFA Semicon 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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