Correlation Between Dongwon System and DAEA TI
Can any of the company-specific risk be diversified away by investing in both Dongwon System and DAEA TI 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 DAEA TI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and DAEA TI Co, you can compare the effects of market volatilities on Dongwon System and DAEA TI 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 DAEA TI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and DAEA TI.
Diversification Opportunities for Dongwon System and DAEA TI
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and DAEA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and DAEA TI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEA TI 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 DAEA TI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEA TI has no effect on the direction of Dongwon System i.e., Dongwon System and DAEA TI go up and down completely randomly.
Pair Corralation between Dongwon System and DAEA TI
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.46 times more return on investment than DAEA TI. However, Dongwon System is 1.46 times more volatile than DAEA TI Co. It trades about 0.02 of its potential returns per unit of risk. DAEA TI 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. DAEA TI Co
Performance |
| Timeline |
| Dongwon System |
| DAEA TI |
Dongwon System and DAEA TI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and DAEA TI
The main advantage of trading using opposite Dongwon System and DAEA TI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, DAEA TI 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 DAEA TI will offset losses from the drop in DAEA TI'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 |
| DAEA TI vs. EO Technics Co | DAEA TI vs. EASY HOLDINGS Co | DAEA TI vs. Nepes | DAEA TI vs. JUSUNG ENGINEERING 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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