Correlation Between Digital Power and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Digital Power and DONGKUK TED 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 Digital Power and DONGKUK TED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and DONGKUK TED METAL, you can compare the effects of market volatilities on Digital Power and DONGKUK TED 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 Digital Power with a short position of DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and DONGKUK TED.
Diversification Opportunities for Digital Power and DONGKUK TED
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digital and DONGKUK is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL and Digital Power 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 Digital Power Communications are associated (or correlated) with DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Digital Power i.e., Digital Power and DONGKUK TED go up and down completely randomly.
Pair Corralation between Digital Power and DONGKUK TED
Assuming the 90 days trading horizon Digital Power Communications is expected to under-perform the DONGKUK TED. In addition to that, Digital Power is 1.0 times more volatile than DONGKUK TED METAL. It trades about -0.3 of its total potential returns per unit of risk. DONGKUK TED METAL is currently generating about 0.32 per unit of volatility. If you would invest 608,000 in DONGKUK TED METAL on October 25, 2024 and sell it today you would earn a total of 42,000 from holding DONGKUK TED METAL or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. DONGKUK TED METAL
Performance |
| Timeline |
| Digital Power Commun |
| DONGKUK TED METAL |
Digital Power and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and DONGKUK TED
The main advantage of trading using opposite Digital Power and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED's long position.| Digital Power vs. KB Financial Group | Digital Power vs. Shinhan Financial Group | Digital Power vs. Hana Financial | Digital Power vs. Woori Financial Group |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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