Correlation Between Dongsin Engineering and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on Dongsin Engineering and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Kaonmedia.
Diversification Opportunities for Dongsin Engineering and Kaonmedia
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongsin and Kaonmedia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Kaonmedia go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Kaonmedia
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to under-perform the Kaonmedia. In addition to that, Dongsin Engineering is 2.63 times more volatile than Kaonmedia Co. It trades about -0.04 of its total potential returns per unit of risk. Kaonmedia Co is currently generating about -0.01 per unit of volatility. If you would invest 343,000 in Kaonmedia Co on September 2, 2024 and sell it today you would lose (6,000) from holding Kaonmedia Co or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Kaonmedia Co
Performance |
| Timeline |
| Dongsin Engineering |
| Kaonmedia |
Dongsin Engineering and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Kaonmedia
The main advantage of trading using opposite Dongsin Engineering and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. Finebesteel |
| Kaonmedia vs. Dongsin Engineering Construction | Kaonmedia vs. Doosan Fuel Cell | Kaonmedia vs. Daishin Balance 1 | Kaonmedia 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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