Correlation Between Dongwon System and Eugene Technology
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Eugene 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 Eugene 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 Eugene Technology CoLtd, you can compare the effects of market volatilities on Dongwon System and Eugene 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 Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Eugene Technology.
Diversification Opportunities for Dongwon System and Eugene Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongwon and Eugene is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology CoLtd 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 Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of Dongwon System i.e., Dongwon System and Eugene Technology go up and down completely randomly.
Pair Corralation between Dongwon System and Eugene Technology
Assuming the 90 days trading horizon Dongwon System is expected to generate 0.87 times more return on investment than Eugene Technology. However, Dongwon System is 1.15 times less risky than Eugene Technology. It trades about 0.06 of its potential returns per unit of risk. Eugene Technology CoLtd is currently generating about -0.01 per unit of risk. If you would invest 3,072,905 in Dongwon System on September 14, 2024 and sell it today you would earn a total of 1,237,095 from holding Dongwon System or generate 40.26% 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. Eugene Technology CoLtd
Performance |
| Timeline |
| Dongwon System |
| Eugene Technology CoLtd |
Dongwon System and Eugene Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Eugene Technology
The main advantage of trading using opposite Dongwon System and Eugene Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Eugene 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 Eugene Technology will offset losses from the drop in Eugene Technology'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 |
| Eugene Technology vs. Cube Entertainment | Eugene Technology vs. Dreamus Company | Eugene Technology vs. LG Energy Solution | Eugene 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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