Correlation Between Dongwon Metal and Samlip General
Can any of the company-specific risk be diversified away by investing in both Dongwon Metal and Samlip General 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 Metal and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon Metal Co and Samlip General Foods, you can compare the effects of market volatilities on Dongwon Metal and Samlip General 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 Metal with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Metal and Samlip General.
Diversification Opportunities for Dongwon Metal and Samlip General
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongwon and Samlip is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Metal Co and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and Dongwon Metal 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 Metal Co are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Dongwon Metal i.e., Dongwon Metal and Samlip General go up and down completely randomly.
Pair Corralation between Dongwon Metal and Samlip General
Assuming the 90 days trading horizon Dongwon Metal Co is expected to generate 3.2 times more return on investment than Samlip General. However, Dongwon Metal is 3.2 times more volatile than Samlip General Foods. It trades about 0.05 of its potential returns per unit of risk. Samlip General Foods is currently generating about -0.04 per unit of risk. If you would invest 96,465 in Dongwon Metal Co on November 9, 2024 and sell it today you would earn a total of 87,935 from holding Dongwon Metal Co or generate 91.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Metal Co vs. Samlip General Foods
Performance |
| Timeline |
| Dongwon Metal |
| Samlip General Foods |
Dongwon Metal and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Metal and Samlip General
The main advantage of trading using opposite Dongwon Metal and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Metal position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Dongwon Metal vs. AptaBio Therapeutics | Dongwon Metal vs. Daewoo SBI SPAC | Dongwon Metal vs. Dream Security co | Dongwon Metal vs. Microfriend |
| Samlip General vs. Air Busan Co | Samlip General vs. Namhae Chemical | Samlip General vs. SH Energy Chemical | Samlip General vs. Kukdong Oil Chemicals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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