Correlation Between Dongwon System and KG Eco
Can any of the company-specific risk be diversified away by investing in both Dongwon System and KG Eco 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 KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and KG Eco Technology, you can compare the effects of market volatilities on Dongwon System and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and KG Eco.
Diversification Opportunities for Dongwon System and KG Eco
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongwon and 151860 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Dongwon System i.e., Dongwon System and KG Eco go up and down completely randomly.
Pair Corralation between Dongwon System and KG Eco
Assuming the 90 days trading horizon Dongwon System is expected to generate 2.08 times less return on investment than KG Eco. In addition to that, Dongwon System is 1.73 times more volatile than KG Eco Technology. It trades about 0.11 of its total potential returns per unit of risk. KG Eco Technology is currently generating about 0.39 per unit of volatility. If you would invest 496,000 in KG Eco Technology on November 27, 2024 and sell it today you would earn a total of 55,000 from holding KG Eco Technology or generate 11.09% 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. KG Eco Technology
Performance |
| Timeline |
| Dongwon System |
| KG Eco Technology |
Dongwon System and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and KG Eco
The main advantage of trading using opposite Dongwon System and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco'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 |
| KG Eco vs. Young Heung Iron | KG Eco vs. Daehan Steel | KG Eco vs. Daewoo Engineering Construction | KG Eco vs. Fine Besteel Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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