Correlation Between Dongsin Engineering and Itcen Co
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Itcen Co 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 Itcen Co 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 Itcen Co, you can compare the effects of market volatilities on Dongsin Engineering and Itcen Co 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 Itcen Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Itcen Co.
Diversification Opportunities for Dongsin Engineering and Itcen Co
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongsin and Itcen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen Co 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 Itcen Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen Co has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Itcen Co go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Itcen Co
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 1.38 times more return on investment than Itcen Co. However, Dongsin Engineering is 1.38 times more volatile than Itcen Co. It trades about 0.07 of its potential returns per unit of risk. Itcen Co is currently generating about 0.04 per unit of risk. If you would invest 1,392,873 in Dongsin Engineering Construction on September 28, 2024 and sell it today you would earn a total of 2,867,127 from holding Dongsin Engineering Construction or generate 205.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Itcen Co
Performance |
| Timeline |
| Dongsin Engineering |
| Itcen Co |
Dongsin Engineering and Itcen Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Itcen Co
The main advantage of trading using opposite Dongsin Engineering and Itcen Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Itcen Co 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 Itcen Co will offset losses from the drop in Itcen Co's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Nable Communications | Dongsin Engineering vs. YG Entertainment | Dongsin Engineering vs. Hyundai Mobis |
| Itcen Co vs. Ssangyong Materials Corp | Itcen Co vs. Daejung Chemicals Metals | Itcen Co vs. Kbi Metal Co | Itcen Co vs. Top Material 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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