Correlation Between Dongil Steel and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Hansol Homedeco 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 Dongil Steel and Hansol Homedeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Steel Co and Hansol Homedeco Co, you can compare the effects of market volatilities on Dongil Steel and Hansol Homedeco 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 Dongil Steel with a short position of Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Hansol Homedeco.
Diversification Opportunities for Dongil Steel and Hansol Homedeco
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongil and Hansol is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco and Dongil Steel 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 Dongil Steel Co are associated (or correlated) with Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Dongil Steel i.e., Dongil Steel and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Dongil Steel and Hansol Homedeco
Assuming the 90 days trading horizon Dongil Steel Co is expected to generate 1.16 times more return on investment than Hansol Homedeco. However, Dongil Steel is 1.16 times more volatile than Hansol Homedeco Co. It trades about 0.1 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 96,100 in Dongil Steel Co on August 25, 2024 and sell it today you would earn a total of 23,900 from holding Dongil Steel Co or generate 24.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Dongil Steel |
| Hansol Homedeco |
Dongil Steel and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Hansol Homedeco
The main advantage of trading using opposite Dongil Steel and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Dongil Steel vs. Namhwa Industrial Co | Dongil Steel vs. Green Cross Medical | Dongil Steel vs. Busan Industrial Co | Dongil Steel vs. Homecast CoLtd |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Daewoo SBI SPAC | Hansol Homedeco vs. Dream Security co | Hansol Homedeco 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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