Correlation Between Kwang Jin and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Kwang Jin and Dongil Metal 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 Kwang Jin and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kwang Jin Ind and Dongil Metal Co, you can compare the effects of market volatilities on Kwang Jin and Dongil Metal 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 Kwang Jin with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwang Jin and Dongil Metal.
Diversification Opportunities for Kwang Jin and Dongil Metal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kwang and Dongil is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kwang Jin Ind and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Kwang Jin 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 Kwang Jin Ind are associated (or correlated) with Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Kwang Jin i.e., Kwang Jin and Dongil Metal go up and down completely randomly.
Pair Corralation between Kwang Jin and Dongil Metal
Assuming the 90 days trading horizon Kwang Jin Ind is expected to generate 1.24 times more return on investment than Dongil Metal. However, Kwang Jin is 1.24 times more volatile than Dongil Metal Co. It trades about 0.07 of its potential returns per unit of risk. Dongil Metal Co is currently generating about -0.11 per unit of risk. If you would invest 198,500 in Kwang Jin Ind on September 19, 2024 and sell it today you would earn a total of 5,000 from holding Kwang Jin Ind or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kwang Jin Ind vs. Dongil Metal Co
Performance |
| Timeline |
| Kwang Jin Ind |
| Dongil Metal |
Kwang Jin and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwang Jin and Dongil Metal
The main advantage of trading using opposite Kwang Jin and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwang Jin position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Kwang Jin vs. SK Telecom Co | Kwang Jin vs. Korea Information Communications | Kwang Jin vs. Hansol Homedeco Co | Kwang Jin vs. Kukil Metal Co |
| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |