Correlation Between Dongwon Metal and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Dongwon Metal and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Dongwon Metal and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Metal and Jeju Bank.
Diversification Opportunities for Dongwon Metal and Jeju Bank
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongwon and Jeju is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Metal Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Dongwon Metal i.e., Dongwon Metal and Jeju Bank go up and down completely randomly.
Pair Corralation between Dongwon Metal and Jeju Bank
Assuming the 90 days trading horizon Dongwon Metal Co is expected to under-perform the Jeju Bank. In addition to that, Dongwon Metal is 1.46 times more volatile than Jeju Bank. It trades about -0.15 of its total potential returns per unit of risk. Jeju Bank is currently generating about -0.04 per unit of volatility. If you would invest 824,000 in Jeju Bank on August 29, 2024 and sell it today you would lose (12,000) from holding Jeju Bank or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Metal Co vs. Jeju Bank
Performance |
| Timeline |
| Dongwon Metal |
| Jeju Bank |
Dongwon Metal and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Metal and Jeju Bank
The main advantage of trading using opposite Dongwon Metal and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Metal position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Dongwon Metal vs. ABOV Semiconductor Co | Dongwon Metal vs. DataSolution | Dongwon Metal vs. Ssangyong Information Communication | Dongwon Metal vs. Nable Communications |
| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |