Correlation Between Tuksu Engineering and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Tuksu Engineering and Dongbang Ship 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 Tuksu Engineering and Dongbang Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and Dongbang Ship Machinery, you can compare the effects of market volatilities on Tuksu Engineering and Dongbang Ship 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 Tuksu Engineering with a short position of Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and Dongbang Ship.
Diversification Opportunities for Tuksu Engineering and Dongbang Ship
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tuksu and Dongbang is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery and Tuksu 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 Tuksu Engineering ConstructionLtd are associated (or correlated) with Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Tuksu Engineering i.e., Tuksu Engineering and Dongbang Ship go up and down completely randomly.
Pair Corralation between Tuksu Engineering and Dongbang Ship
Assuming the 90 days trading horizon Tuksu Engineering ConstructionLtd is expected to generate 1.21 times more return on investment than Dongbang Ship. However, Tuksu Engineering is 1.21 times more volatile than Dongbang Ship Machinery. It trades about 0.03 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.02 per unit of risk. If you would invest 624,000 in Tuksu Engineering ConstructionLtd on August 29, 2024 and sell it today you would earn a total of 9,000 from holding Tuksu Engineering ConstructionLtd or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuksu Engineering Construction vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Tuksu Engineering |
| Dongbang Ship Machinery |
Tuksu Engineering and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuksu Engineering and Dongbang Ship
The main advantage of trading using opposite Tuksu Engineering and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuksu Engineering position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Hyundai Motor Co | Tuksu Engineering vs. Hyundai Motor |
| Dongbang Ship vs. Koryo Credit Information | Dongbang Ship vs. Sungdo Engineering Construction | Dongbang Ship vs. Nice Information Telecommunication | Dongbang Ship vs. Shinsegae Information Communication |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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