Correlation Between Dongwon System and Atec
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Atec 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 Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and Atec Co, you can compare the effects of market volatilities on Dongwon System and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Atec.
Diversification Opportunities for Dongwon System and Atec
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwon and Atec is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Dongwon System i.e., Dongwon System and Atec go up and down completely randomly.
Pair Corralation between Dongwon System and Atec
Assuming the 90 days trading horizon Dongwon System is expected to generate 3.64 times less return on investment than Atec. But when comparing it to its historical volatility, Dongwon System is 1.71 times less risky than Atec. It trades about 0.05 of its potential returns per unit of risk. Atec Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,287,830 in Atec Co on September 14, 2024 and sell it today you would earn a total of 2,107,170 from holding Atec Co or generate 163.62% 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. Atec Co
Performance |
| Timeline |
| Dongwon System |
| Atec |
Dongwon System and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Atec
The main advantage of trading using opposite Dongwon System and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec'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 |
| Atec vs. Digital Power Communications | Atec vs. Lotte Data Communication | Atec vs. Seoul Electronics Telecom | Atec vs. Korea Information Communications |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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