Correlation Between Dongsin Engineering and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Dongsin Engineering and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and GemVaxKAEL CoLtd.
Diversification Opportunities for Dongsin Engineering and GemVaxKAEL CoLtd
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongsin and GemVaxKAEL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Dongsin Engineering and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Dongsin Engineering is expected to generate 3.5 times less return on investment than GemVaxKAEL CoLtd. But when comparing it to its historical volatility, Dongsin Engineering Construction is 1.55 times less risky than GemVaxKAEL CoLtd. It trades about 0.27 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.6 of returns per unit of risk over similar time horizon. If you would invest 1,887,000 in GemVaxKAEL CoLtd on December 1, 2024 and sell it today you would earn a total of 1,858,000 from holding GemVaxKAEL CoLtd or generate 98.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Dongsin Engineering |
| GemVaxKAEL CoLtd |
Dongsin Engineering and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and GemVaxKAEL CoLtd
The main advantage of trading using opposite Dongsin Engineering and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Dongsin Engineering vs. PLAYWITH | Dongsin Engineering vs. Playgram Co | Dongsin Engineering vs. Sangsin Energy Display | Dongsin Engineering vs. Sewoon Medical Co |
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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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