Correlation Between Dongsin Engineering and System
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and System 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 System 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 System and Application, you can compare the effects of market volatilities on Dongsin Engineering and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and System.
Diversification Opportunities for Dongsin Engineering and System
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongsin and System is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and System go up and down completely randomly.
Pair Corralation between Dongsin Engineering and System
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to under-perform the System. In addition to that, Dongsin Engineering is 2.14 times more volatile than System and Application. It trades about -0.17 of its total potential returns per unit of risk. System and Application is currently generating about -0.02 per unit of volatility. If you would invest 157,100 in System and Application on November 7, 2024 and sell it today you would lose (3,100) from holding System and Application or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. System and Application
Performance |
| Timeline |
| Dongsin Engineering |
| System and Application |
Dongsin Engineering and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and System
The main advantage of trading using opposite Dongsin Engineering and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Dongsin Engineering vs. Samick Musical Instruments | Dongsin Engineering vs. INNOX Advanced Materials | Dongsin Engineering vs. Neungyule Education | Dongsin Engineering vs. Mobile Appliance |
| System vs. Pan Entertainment Co | System vs. SK Chemicals Co | System vs. Tamul Multimedia Co | System vs. ISU Chemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |