Correlation Between Dongsin Engineering and NHN KCP
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and NHN KCP 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 NHN KCP 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 NHN KCP Corp, you can compare the effects of market volatilities on Dongsin Engineering and NHN KCP 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 NHN KCP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and NHN KCP.
Diversification Opportunities for Dongsin Engineering and NHN KCP
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and NHN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and NHN KCP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NHN KCP Corp 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 NHN KCP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NHN KCP Corp has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and NHN KCP go up and down completely randomly.
Pair Corralation between Dongsin Engineering and NHN KCP
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 1.8 times more return on investment than NHN KCP. However, Dongsin Engineering is 1.8 times more volatile than NHN KCP Corp. It trades about 0.05 of its potential returns per unit of risk. NHN KCP Corp is currently generating about -0.05 per unit of risk. If you would invest 1,595,935 in Dongsin Engineering Construction on September 3, 2024 and sell it today you would earn a total of 499,065 from holding Dongsin Engineering Construction or generate 31.27% 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. NHN KCP Corp
Performance |
| Timeline |
| Dongsin Engineering |
| NHN KCP Corp |
Dongsin Engineering and NHN KCP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and NHN KCP
The main advantage of trading using opposite Dongsin Engineering and NHN KCP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, NHN KCP 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 NHN KCP will offset losses from the drop in NHN KCP'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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