Correlation Between Dongsin Engineering and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Samjin LND 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 Samjin LND 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 Samjin LND Co, you can compare the effects of market volatilities on Dongsin Engineering and Samjin LND 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 Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Samjin LND.
Diversification Opportunities for Dongsin Engineering and Samjin LND
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongsin and Samjin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND 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 Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Samjin LND go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Samjin LND
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 3.79 times more return on investment than Samjin LND. However, Dongsin Engineering is 3.79 times more volatile than Samjin LND Co. It trades about 0.0 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.23 per unit of risk. If you would invest 2,300,000 in Dongsin Engineering Construction on September 4, 2024 and sell it today you would lose (205,000) from holding Dongsin Engineering Construction or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Samjin LND Co
Performance |
| Timeline |
| Dongsin Engineering |
| Samjin LND |
Dongsin Engineering and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Samjin LND
The main advantage of trading using opposite Dongsin Engineering and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Dongsin Engineering vs. LG Household Healthcare | Dongsin Engineering vs. Keyang Electric Machinery | Dongsin Engineering vs. GS Engineering Construction | Dongsin Engineering vs. Dongbang Ship Machinery |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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