Correlation Between Stic Investments and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Dongbang Transport 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 Stic Investments and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Dongbang Transport Logistics, you can compare the effects of market volatilities on Stic Investments and Dongbang Transport 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 Stic Investments with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Dongbang Transport.
Diversification Opportunities for Stic Investments and Dongbang Transport
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and Dongbang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Stic Investments 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 Stic Investments are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Stic Investments i.e., Stic Investments and Dongbang Transport go up and down completely randomly.
Pair Corralation between Stic Investments and Dongbang Transport
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.04 times more return on investment than Dongbang Transport. However, Stic Investments is 1.04 times more volatile than Dongbang Transport Logistics. It trades about -0.06 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about -0.1 per unit of risk. If you would invest 806,000 in Stic Investments on August 24, 2024 and sell it today you would lose (26,000) from holding Stic Investments or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Stic Investments |
| Dongbang Transport |
Stic Investments and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Dongbang Transport
The main advantage of trading using opposite Stic Investments and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Dongbang Transport 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 Transport will offset losses from the drop in Dongbang Transport's long position.| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments vs. Wonbang Tech Co |
| Dongbang Transport vs. AptaBio Therapeutics | Dongbang Transport vs. Daewoo SBI SPAC | Dongbang Transport vs. Dream Security co | Dongbang Transport vs. Microfriend |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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