Correlation Between Dongwon System and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Dongwon System and EBEST Investment 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 EBEST Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and EBEST Investment Securities, you can compare the effects of market volatilities on Dongwon System and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and EBEST Investment.
Diversification Opportunities for Dongwon System and EBEST Investment
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and EBEST is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Dongwon System i.e., Dongwon System and EBEST Investment go up and down completely randomly.
Pair Corralation between Dongwon System and EBEST Investment
Assuming the 90 days trading horizon Dongwon System is expected to generate 2.33 times more return on investment than EBEST Investment. However, Dongwon System is 2.33 times more volatile than EBEST Investment Securities. It trades about 0.11 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about 0.02 per unit of risk. If you would invest 3,795,000 in Dongwon System on November 27, 2024 and sell it today you would earn a total of 175,000 from holding Dongwon System or generate 4.61% 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. EBEST Investment Securities
Performance |
| Timeline |
| Dongwon System |
| EBEST Investment Sec |
Dongwon System and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and EBEST Investment
The main advantage of trading using opposite Dongwon System and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Dongwon System vs. DB Financial Investment | Dongwon System vs. KakaoBank Corp | Dongwon System vs. Shinhan Inverse Silver | Dongwon System vs. DoubleU Games Co |
| EBEST Investment vs. Namhae Chemical | EBEST Investment vs. Lotte Fine Chemical | EBEST Investment vs. Dongil Metal Co | EBEST Investment vs. Kumho Petro Chemical |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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