Correlation Between Dongwon System and System
Can any of the company-specific risk be diversified away by investing in both Dongwon System and System 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 System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and System and Application, you can compare the effects of market volatilities on Dongwon System and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and System.
Diversification Opportunities for Dongwon System and System
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongwon and System is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Dongwon System i.e., Dongwon System and System go up and down completely randomly.
Pair Corralation between Dongwon System and System
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.19 times more return on investment than System. However, Dongwon System is 1.19 times more volatile than System and Application. It trades about 0.14 of its potential returns per unit of risk. System and Application is currently generating about 0.14 per unit of risk. If you would invest 3,480,000 in Dongwon System on December 4, 2024 and sell it today you would earn a total of 215,000 from holding Dongwon System or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. System and Application
Performance |
| Timeline |
| Dongwon System |
| System and Application |
Dongwon System and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and System
The main advantage of trading using opposite Dongwon System and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Dongwon System vs. Lotte Rental Co | Dongwon System vs. Jahwa Electronics Co | Dongwon System vs. Hanmi Semiconductor Co | Dongwon System vs. Samyoung Electronics Co |
| System vs. Stic Investments | System vs. NH Investment Securities | System vs. Yura Tech Co | System vs. Golden Bridge Investment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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