Correlation Between Dongsin Engineering and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Jahwa Electron 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 Jahwa Electron 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 Jahwa Electron, you can compare the effects of market volatilities on Dongsin Engineering and Jahwa Electron 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 Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Jahwa Electron.
Diversification Opportunities for Dongsin Engineering and Jahwa Electron
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and Jahwa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron 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 Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Jahwa Electron go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Jahwa Electron
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 4.2 times more return on investment than Jahwa Electron. However, Dongsin Engineering is 4.2 times more volatile than Jahwa Electron. It trades about 0.43 of its potential returns per unit of risk. Jahwa Electron is currently generating about -0.14 per unit of risk. If you would invest 1,520,000 in Dongsin Engineering Construction on September 22, 2024 and sell it today you would earn a total of 2,980,000 from holding Dongsin Engineering Construction or generate 196.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Jahwa Electron
Performance |
| Timeline |
| Dongsin Engineering |
| Jahwa Electron |
Dongsin Engineering and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Jahwa Electron
The main advantage of trading using opposite Dongsin Engineering and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's long position.| Dongsin Engineering vs. Naver | Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo |
| Jahwa Electron vs. Dongsin Engineering Construction | Jahwa Electron vs. Doosan Fuel Cell | Jahwa Electron vs. Daishin Balance 1 | Jahwa Electron 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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