Correlation Between Dongwon Metal and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both Dongwon Metal and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd, you can compare the effects of market volatilities on Dongwon Metal and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon Metal and CHEMTRONICSCOLtd.
Diversification Opportunities for Dongwon Metal and CHEMTRONICSCOLtd
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongwon and CHEMTRONICSCOLtd is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon Metal Co and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of Dongwon Metal i.e., Dongwon Metal and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between Dongwon Metal and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon Dongwon Metal Co is expected to generate 0.83 times more return on investment than CHEMTRONICSCOLtd. However, Dongwon Metal Co is 1.21 times less risky than CHEMTRONICSCOLtd. It trades about -0.34 of its potential returns per unit of risk. CHEMTRONICSCOLtd is currently generating about -0.47 per unit of risk. If you would invest 128,500 in Dongwon Metal Co on September 1, 2024 and sell it today you would lose (16,600) from holding Dongwon Metal Co or give up 12.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dongwon Metal Co vs. CHEMTRONICSCOLtd
Performance |
| Timeline |
| Dongwon Metal |
| CHEMTRONICSCOLtd |
Dongwon Metal and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon Metal and CHEMTRONICSCOLtd
The main advantage of trading using opposite Dongwon Metal and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon Metal position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd's long position.| Dongwon Metal vs. AptaBio Therapeutics | Dongwon Metal vs. Daewoo SBI SPAC | Dongwon Metal vs. Dream Security co | Dongwon Metal vs. Microfriend |
| CHEMTRONICSCOLtd vs. Hyundai Green Food | CHEMTRONICSCOLtd vs. Inzi Display CoLtd | CHEMTRONICSCOLtd vs. CKH Food Health | CHEMTRONICSCOLtd vs. Iljin Display |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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