Correlation Between Dongsin Engineering and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Woori Technology 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 Woori Technology 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 Woori Technology, you can compare the effects of market volatilities on Dongsin Engineering and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Woori Technology.
Diversification Opportunities for Dongsin Engineering and Woori Technology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongsin and Woori is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Woori Technology go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Woori Technology
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to under-perform the Woori Technology. In addition to that, Dongsin Engineering is 3.24 times more volatile than Woori Technology. It trades about -0.05 of its total potential returns per unit of risk. Woori Technology is currently generating about 0.04 per unit of volatility. If you would invest 219,000 in Woori Technology on September 3, 2024 and sell it today you would earn a total of 3,500 from holding Woori Technology or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Woori Technology
Performance |
| Timeline |
| Dongsin Engineering |
| Woori Technology |
Dongsin Engineering and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Woori Technology
The main advantage of trading using opposite Dongsin Engineering and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Dongsin Engineering vs. DB Financial Investment | Dongsin Engineering vs. EBEST Investment Securities | Dongsin Engineering vs. Stic Investments | Dongsin Engineering vs. Sangsangin Investment Securities |
| Woori Technology vs. GS Retail Co | Woori Technology vs. Neungyule Education | Woori Technology vs. KMH Hitech Co | Woori Technology vs. Sungchang Autotech 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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