Correlation Between Dongwon System and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both Dongwon System and Puloon 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 Puloon 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 Puloon Technology, you can compare the effects of market volatilities on Dongwon System and Puloon 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Puloon Technology.
Diversification Opportunities for Dongwon System and Puloon Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and Puloon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Dongwon System i.e., Dongwon System and Puloon Technology go up and down completely randomly.
Pair Corralation between Dongwon System and Puloon Technology
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.27 times more return on investment than Puloon Technology. However, Dongwon System is 1.27 times more volatile than Puloon Technology. It trades about 0.05 of its potential returns per unit of risk. Puloon Technology is currently generating about -0.02 per unit of risk. If you would invest 3,132,095 in Dongwon System on September 21, 2024 and sell it today you would earn a total of 912,905 from holding Dongwon System or generate 29.15% 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. Puloon Technology
Performance |
| Timeline |
| Dongwon System |
| Puloon Technology |
Dongwon System and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Puloon Technology
The main advantage of trading using opposite Dongwon System and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, Puloon 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| Dongwon System vs. CU Medical Systems | Dongwon System vs. Netmarble Games Corp | Dongwon System vs. Sangsin Energy Display | Dongwon System vs. Aprogen Healthcare Games |
| Puloon Technology vs. Cube Entertainment | Puloon Technology vs. Dreamus Company | Puloon Technology vs. LG Energy Solution | Puloon 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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