Correlation Between Dongsin Engineering and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Puloon Technology 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 Puloon Technology 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 Puloon Technology, you can compare the effects of market volatilities on Dongsin Engineering and Puloon Technology 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Puloon Technology.
Diversification Opportunities for Dongsin Engineering and Puloon Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongsin and Puloon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Puloon Technology go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Puloon Technology
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to under-perform the Puloon Technology. In addition to that, Dongsin Engineering is 3.73 times more volatile than Puloon Technology. It trades about -0.25 of its total potential returns per unit of risk. Puloon Technology is currently generating about 0.14 per unit of volatility. If you would invest 725,000 in Puloon Technology on November 1, 2024 and sell it today you would earn a total of 29,000 from holding Puloon Technology or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Puloon Technology
Performance |
| Timeline |
| Dongsin Engineering |
| Puloon Technology |
Dongsin Engineering and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Puloon Technology
The main advantage of trading using opposite Dongsin Engineering and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Puloon Technology 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| Dongsin Engineering vs. Ssangyong Information Communication | Dongsin Engineering vs. Ananti Inc | Dongsin Engineering vs. JYP Entertainment | Dongsin Engineering vs. Naver |
| Puloon Technology vs. Eagon Industrial Co | Puloon Technology vs. LG Household Healthcare | Puloon Technology vs. Wireless Power Amplifier | Puloon Technology vs. Mobileleader CoLtd |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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