Correlation Between Dongsin Engineering and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Dongsin Engineering and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Samsung Electronics.
Diversification Opportunities for Dongsin Engineering and Samsung Electronics
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongsin and Samsung is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Samsung Electronics go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Samsung Electronics
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 3.35 times more return on investment than Samsung Electronics. However, Dongsin Engineering is 3.35 times more volatile than Samsung Electronics Co. It trades about -0.01 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.09 per unit of risk. If you would invest 2,100,000 in Dongsin Engineering Construction on August 31, 2024 and sell it today you would lose (220,000) from holding Dongsin Engineering Construction or give up 10.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Samsung Electronics Co
Performance |
| Timeline |
| Dongsin Engineering |
| Samsung Electronics |
Dongsin Engineering and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Samsung Electronics
The main advantage of trading using opposite Dongsin Engineering and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. Finebesteel |
| Samsung Electronics vs. Dongsin Engineering Construction | Samsung Electronics vs. Doosan Fuel Cell | Samsung Electronics vs. Daishin Balance 1 | Samsung Electronics vs. Total Soft Bank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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