Correlation Between Dongil Steel and Dong A
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on Dongil Steel and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Dong A.
Diversification Opportunities for Dongil Steel and Dong A
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongil and Dong is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Dongil Steel i.e., Dongil Steel and Dong A go up and down completely randomly.
Pair Corralation between Dongil Steel and Dong A
Assuming the 90 days trading horizon Dongil Steel Co is expected to generate 0.5 times more return on investment than Dong A. However, Dongil Steel Co is 2.01 times less risky than Dong A. It trades about 0.1 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about 0.02 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Dong A Steel Technology
Performance |
| Timeline |
| Dongil Steel |
| Dong A Steel |
Dongil Steel and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Dong A
The main advantage of trading using opposite Dongil Steel and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A'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 |
| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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