Correlation Between Dongwon System and HB Technology
Can any of the company-specific risk be diversified away by investing in both Dongwon System and HB Technology 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 HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and HB Technology TD, you can compare the effects of market volatilities on Dongwon System and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and HB Technology.
Diversification Opportunities for Dongwon System and HB Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongwon and 078150 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Dongwon System i.e., Dongwon System and HB Technology go up and down completely randomly.
Pair Corralation between Dongwon System and HB Technology
Assuming the 90 days trading horizon Dongwon System is expected to generate 0.83 times more return on investment than HB Technology. However, Dongwon System is 1.2 times less risky than HB Technology. It trades about -0.16 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.24 per unit of risk. If you would invest 4,755,000 in Dongwon System on September 12, 2024 and sell it today you would lose (580,000) from holding Dongwon System or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. HB Technology TD
Performance |
| Timeline |
| Dongwon System |
| HB Technology TD |
Dongwon System and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and HB Technology
The main advantage of trading using opposite Dongwon System and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Lotte Chemical Corp |
| HB Technology vs. Cube Entertainment | HB Technology vs. Dreamus Company | HB Technology vs. LG Energy Solution | HB Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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