Correlation Between Dongsin Engineering and Korea Air
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Korea Air 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 Dongsin Engineering and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongsin Engineering Construction and Korea Air Svc, you can compare the effects of market volatilities on Dongsin Engineering and Korea Air 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 Dongsin Engineering with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Korea Air.
Diversification Opportunities for Dongsin Engineering and Korea Air
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongsin and Korea is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc and Dongsin Engineering 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 Dongsin Engineering Construction are associated (or correlated) with Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Korea Air go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Korea Air
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 2.12 times more return on investment than Korea Air. However, Dongsin Engineering is 2.12 times more volatile than Korea Air Svc. It trades about 0.03 of its potential returns per unit of risk. Korea Air Svc is currently generating about 0.04 per unit of risk. If you would invest 1,489,534 in Dongsin Engineering Construction on August 27, 2024 and sell it today you would earn a total of 83,466 from holding Dongsin Engineering Construction or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Korea Air Svc
Performance |
| Timeline |
| Dongsin Engineering |
| Korea Air Svc |
Dongsin Engineering and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Korea Air
The main advantage of trading using opposite Dongsin Engineering and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Korea Air 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 Korea Air will offset losses from the drop in Korea Air's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. UNISEM Co |
| Korea Air vs. Samsung Electronics Co | Korea Air vs. Samsung Electronics Co | Korea Air vs. Hyundai Motor Co | Korea Air vs. Hyundai Motor |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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