Correlation Between Dongsin Engineering and InfoBank
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and InfoBank 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 InfoBank 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 InfoBank, you can compare the effects of market volatilities on Dongsin Engineering and InfoBank 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 InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and InfoBank.
Diversification Opportunities for Dongsin Engineering and InfoBank
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and InfoBank is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank 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 InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and InfoBank go up and down completely randomly.
Pair Corralation between Dongsin Engineering and InfoBank
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 1.56 times more return on investment than InfoBank. However, Dongsin Engineering is 1.56 times more volatile than InfoBank. It trades about 0.04 of its potential returns per unit of risk. InfoBank is currently generating about -0.02 per unit of risk. If you would invest 1,455,236 in Dongsin Engineering Construction on September 2, 2024 and sell it today you would earn a total of 466,764 from holding Dongsin Engineering Construction or generate 32.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. InfoBank
Performance |
| Timeline |
| Dongsin Engineering |
| InfoBank |
Dongsin Engineering and InfoBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and InfoBank
The main advantage of trading using opposite Dongsin Engineering and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. Finebesteel |
| InfoBank vs. Dongsin Engineering Construction | InfoBank vs. Doosan Fuel Cell | InfoBank vs. Daishin Balance 1 | InfoBank 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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