Correlation Between Dongwon Metal and Pureun Mutual
Can any of the company-specific risk be diversified away by investing in both Dongwon Metal and Pureun Mutual 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 Pureun Mutual 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 Pureun Mutual Savings, you can compare the effects of market volatilities on Dongwon Metal and Pureun Mutual 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 Pureun Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Metal and Pureun Mutual.
Diversification Opportunities for Dongwon Metal and Pureun Mutual
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwon and Pureun is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Metal Co and Pureun Mutual Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pureun Mutual Savings 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 Pureun Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pureun Mutual Savings has no effect on the direction of Dongwon Metal i.e., Dongwon Metal and Pureun Mutual go up and down completely randomly.
Pair Corralation between Dongwon Metal and Pureun Mutual
Assuming the 90 days trading horizon Dongwon Metal Co is expected to under-perform the Pureun Mutual. But the stock apears to be less risky and, when comparing its historical volatility, Dongwon Metal Co is 1.25 times less risky than Pureun Mutual. The stock trades about -0.04 of its potential returns per unit of risk. The Pureun Mutual Savings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 827,120 in Pureun Mutual Savings on August 25, 2024 and sell it today you would earn a total of 43,880 from holding Pureun Mutual Savings or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Metal Co vs. Pureun Mutual Savings
Performance |
| Timeline |
| Dongwon Metal |
| Pureun Mutual Savings |
Dongwon Metal and Pureun Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Metal and Pureun Mutual
The main advantage of trading using opposite Dongwon Metal and Pureun Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Metal position performs unexpectedly, Pureun Mutual 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 Pureun Mutual will offset losses from the drop in Pureun Mutual's long position.| Dongwon Metal vs. NewFlex Technology Co | Dongwon Metal vs. Daou Technology | Dongwon Metal vs. KB Financial Group | Dongwon Metal vs. Konan Technology |
| Pureun Mutual vs. Korea New Network | Pureun Mutual vs. Dong A Eltek | Pureun Mutual vs. Dreamus Company | Pureun Mutual vs. SK Bioscience 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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