Correlation Between Dongwon Metal and Korea New
Can any of the company-specific risk be diversified away by investing in both Dongwon Metal and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on Dongwon Metal and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Metal and Korea New.
Diversification Opportunities for Dongwon Metal and Korea New
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongwon and Korea is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Metal Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Dongwon Metal i.e., Dongwon Metal and Korea New go up and down completely randomly.
Pair Corralation between Dongwon Metal and Korea New
Assuming the 90 days trading horizon Dongwon Metal Co is expected to generate 2.02 times more return on investment than Korea New. However, Dongwon Metal is 2.02 times more volatile than Korea New Network. It trades about 0.06 of its potential returns per unit of risk. Korea New Network is currently generating about 0.0 per unit of risk. If you would invest 93,322 in Dongwon Metal Co on November 27, 2024 and sell it today you would earn a total of 112,178 from holding Dongwon Metal Co or generate 120.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon Metal Co vs. Korea New Network
Performance |
| Timeline |
| Dongwon Metal |
| Korea New Network |
Dongwon Metal and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Metal and Korea New
The main advantage of trading using opposite Dongwon Metal and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Metal position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Dongwon Metal vs. AptaBio Therapeutics | Dongwon Metal vs. Daewoo SBI SPAC | Dongwon Metal vs. Dream Security co | Dongwon Metal vs. Microfriend |
| Korea New vs. Tae Kyung Chemical | Korea New vs. Jin Air Co | Korea New vs. Korea Air Svc | Korea New vs. SK Chemicals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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