Correlation Between Dongsin Engineering and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and GS 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 Dongsin Engineering and GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on Dongsin Engineering and GS 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 Dongsin Engineering with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and GS Engineering.
Diversification Opportunities for Dongsin Engineering and GS Engineering
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and 006360 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and GS Engineering go up and down completely randomly.
Pair Corralation between Dongsin Engineering and GS Engineering
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 2.07 times more return on investment than GS Engineering. However, Dongsin Engineering is 2.07 times more volatile than GS Engineering Construction. It trades about 0.02 of its potential returns per unit of risk. GS Engineering Construction is currently generating about 0.0 per unit of risk. If you would invest 1,563,031 in Dongsin Engineering Construction on August 23, 2024 and sell it today you would lose (43,031) from holding Dongsin Engineering Construction or give up 2.75% 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. GS Engineering Construction
Performance |
| Timeline |
| Dongsin Engineering |
| GS Engineering Const |
Dongsin Engineering and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and GS Engineering
The main advantage of trading using opposite Dongsin Engineering and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, GS 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. Shinhan WTI Futures |
| GS Engineering vs. LG Household Healthcare | GS Engineering vs. LG Household Healthcare | GS Engineering vs. Semyung Electric Machinery | GS Engineering vs. Hwacheon Machinery 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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