Correlation Between Kyung Chang and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Dongwon Metal 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 Kyung Chang and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and Dongwon Metal Co, you can compare the effects of market volatilities on Kyung Chang and Dongwon Metal 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 Kyung Chang with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Dongwon Metal.
Diversification Opportunities for Kyung Chang and Dongwon Metal
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kyung and Dongwon is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Kyung Chang i.e., Kyung Chang and Dongwon Metal go up and down completely randomly.
Pair Corralation between Kyung Chang and Dongwon Metal
Assuming the 90 days trading horizon Kyung Chang is expected to generate 1.6 times less return on investment than Dongwon Metal. In addition to that, Kyung Chang is 1.05 times more volatile than Dongwon Metal Co. It trades about 0.01 of its total potential returns per unit of risk. Dongwon Metal Co is currently generating about 0.02 per unit of volatility. If you would invest 96,179 in Dongwon Metal Co on September 3, 2024 and sell it today you would earn a total of 12,321 from holding Dongwon Metal Co or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Dongwon Metal Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| Dongwon Metal |
Kyung Chang and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Dongwon Metal
The main advantage of trading using opposite Kyung Chang and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Dongwon Metal 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 Dongwon Metal will offset losses from the drop in Dongwon Metal's long position.| Kyung Chang vs. Orbitech Co | Kyung Chang vs. TK Chemical | Kyung Chang vs. Shinsung Delta Tech | Kyung Chang vs. Posco Chemical Co |
| Dongwon Metal vs. HB Technology TD | Dongwon Metal vs. Hwangkum Steel Technology | Dongwon Metal vs. JYP Entertainment Corp | Dongwon Metal vs. TJ media 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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