Correlation Between Dongsin Engineering and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Dongsin Engineering and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Nable Communications.
Diversification Opportunities for Dongsin Engineering and Nable Communications
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and Nable is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Nable Communications go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Nable Communications
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 8.01 times more return on investment than Nable Communications. However, Dongsin Engineering is 8.01 times more volatile than Nable Communications. It trades about 0.2 of its potential returns per unit of risk. Nable Communications is currently generating about 0.12 per unit of risk. If you would invest 2,320,000 in Dongsin Engineering Construction on September 6, 2024 and sell it today you would earn a total of 1,205,000 from holding Dongsin Engineering Construction or generate 51.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongsin Engineering Constructi vs. Nable Communications
Performance |
| Timeline |
| Dongsin Engineering |
| Nable Communications |
Dongsin Engineering and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Nable Communications
The main advantage of trading using opposite Dongsin Engineering and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. UNISEM Co | Dongsin Engineering vs. Finebesteel | Dongsin Engineering vs. Shinhan Inverse WTI |
| Nable Communications vs. Samsung Electronics Co | Nable Communications vs. Samsung Electronics Co | Nable Communications vs. Hyundai Motor Co | Nable Communications vs. Hyundai Motor 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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