Correlation Between Dongwon System and SS TECH
Can any of the company-specific risk be diversified away by investing in both Dongwon System and SS TECH 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 SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and SS TECH, you can compare the effects of market volatilities on Dongwon System and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and SS TECH.
Diversification Opportunities for Dongwon System and SS TECH
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and 101490 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of Dongwon System i.e., Dongwon System and SS TECH go up and down completely randomly.
Pair Corralation between Dongwon System and SS TECH
Assuming the 90 days trading horizon Dongwon System is expected to generate 0.95 times more return on investment than SS TECH. However, Dongwon System is 1.06 times less risky than SS TECH. It trades about 0.04 of its potential returns per unit of risk. SS TECH is currently generating about -0.05 per unit of risk. If you would invest 3,388,581 in Dongwon System on September 12, 2024 and sell it today you would earn a total of 786,419 from holding Dongwon System or generate 23.21% 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. SS TECH
Performance |
| Timeline |
| Dongwon System |
| SS TECH |
Dongwon System and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and SS TECH
The main advantage of trading using opposite Dongwon System and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Lotte Chemical Corp |
| SS TECH vs. Cube Entertainment | SS TECH vs. Dreamus Company | SS TECH vs. LG Energy Solution | SS TECH 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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