Correlation Between Dragonfly and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both Dragonfly and KHVATEC CoLtd 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 Dragonfly and KHVATEC CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and KHVATEC CoLtd, you can compare the effects of market volatilities on Dragonfly and KHVATEC CoLtd 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 Dragonfly with a short position of KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and KHVATEC CoLtd.
Diversification Opportunities for Dragonfly and KHVATEC CoLtd
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dragonfly and KHVATEC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of Dragonfly i.e., Dragonfly and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between Dragonfly and KHVATEC CoLtd
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the KHVATEC CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Dragonfly GF Co is 1.43 times less risky than KHVATEC CoLtd. The stock trades about -1.09 of its potential returns per unit of risk. The KHVATEC CoLtd is currently generating about -0.27 of returns per unit of risk over similar time horizon. If you would invest 927,000 in KHVATEC CoLtd on September 1, 2024 and sell it today you would lose (102,000) from holding KHVATEC CoLtd or give up 11.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 30.43% |
| Values | Daily Returns |
Dragonfly GF Co vs. KHVATEC CoLtd
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KHVATEC CoLtd |
Dragonfly and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and KHVATEC CoLtd
The main advantage of trading using opposite Dragonfly and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd's long position.| Dragonfly vs. Dongbang Ship Machinery | Dragonfly vs. Daewoo Engineering Construction | Dragonfly vs. Semyung Electric Machinery | Dragonfly vs. Seoam Machinery Industry |
| KHVATEC CoLtd vs. Seoul Semiconductor Co | KHVATEC CoLtd vs. Interflex Co | KHVATEC CoLtd vs. Intops Co | KHVATEC CoLtd vs. Kmw Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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