Correlation Between Lee Ku and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Lee Ku and Dongsin Engineering 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 Lee Ku and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lee Ku Industrial and Dongsin Engineering Construction, you can compare the effects of market volatilities on Lee Ku and Dongsin Engineering 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 Lee Ku with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Ku and Dongsin Engineering.
Diversification Opportunities for Lee Ku and Dongsin Engineering
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lee and Dongsin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lee Ku Industrial and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Lee Ku 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 Lee Ku Industrial are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Lee Ku i.e., Lee Ku and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Lee Ku and Dongsin Engineering
Assuming the 90 days trading horizon Lee Ku Industrial is expected to generate 0.19 times more return on investment than Dongsin Engineering. However, Lee Ku Industrial is 5.16 times less risky than Dongsin Engineering. It trades about 0.13 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.01 per unit of risk. If you would invest 415,000 in Lee Ku Industrial on October 17, 2024 and sell it today you would earn a total of 18,500 from holding Lee Ku Industrial or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lee Ku Industrial vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Lee Ku Industrial |
| Dongsin Engineering |
Lee Ku and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lee Ku and Dongsin Engineering
The main advantage of trading using opposite Lee Ku and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lee Ku position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| Lee Ku vs. Haitai Confectionery Foods | Lee Ku vs. Orbitech Co | Lee Ku vs. KMH Hitech Co | Lee Ku vs. Samyang Foods Co |
| Dongsin Engineering vs. Hwasung Industrial Co | Dongsin Engineering vs. PJ Metal Co | Dongsin Engineering vs. Songwon Industrial Co | Dongsin Engineering vs. Lee Ku Industrial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |