Correlation Between Dongsin Engineering and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and Daishin Balance 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 Daishin Balance 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 Daishin Balance 1, you can compare the effects of market volatilities on Dongsin Engineering and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and Daishin Balance.
Diversification Opportunities for Dongsin Engineering and Daishin Balance
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongsin and Daishin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and Daishin Balance 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance 1 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance 1 has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and Daishin Balance go up and down completely randomly.
Pair Corralation between Dongsin Engineering and Daishin Balance
Assuming the 90 days trading horizon Dongsin Engineering Construction is expected to generate 1.67 times more return on investment than Daishin Balance. However, Dongsin Engineering is 1.67 times more volatile than Daishin Balance 1. It trades about 0.04 of its potential returns per unit of risk. Daishin Balance 1 is currently generating about -0.04 per unit of risk. If you would invest 1,455,236 in Dongsin Engineering Construction on September 2, 2024 and sell it today you would earn a total of 466,764 from holding Dongsin Engineering Construction or generate 32.07% 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. Daishin Balance 1
Performance |
| Timeline |
| Dongsin Engineering |
| Daishin Balance 1 |
Dongsin Engineering and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongsin Engineering and Daishin Balance
The main advantage of trading using opposite Dongsin Engineering and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. Finebesteel |
| Daishin Balance vs. Pan Entertainment Co | Daishin Balance vs. Korea Air Svc | Daishin Balance vs. Air Busan Co | Daishin Balance vs. Mgame Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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