Correlation Between Daou Data and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Daou Data 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 Daou Data and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Data Corp and Dongil Metal Co, you can compare the effects of market volatilities on Daou Data 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 Daou Data with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Dongil Metal.
Diversification Opportunities for Daou Data and Dongil Metal
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daou and Dongil is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Daou Data 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 Daou Data Corp 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 Daou Data i.e., Daou Data and Dongil Metal go up and down completely randomly.
Pair Corralation between Daou Data and Dongil Metal
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Dongil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Daou Data Corp is 2.12 times less risky than Dongil Metal. The stock trades about -0.21 of its potential returns per unit of risk. The Dongil Metal Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 768,701 in Dongil Metal Co on October 25, 2024 and sell it today you would earn a total of 136,299 from holding Dongil Metal Co or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Dongil Metal Co
Performance |
| Timeline |
| Daou Data Corp |
| Dongil Metal |
Daou Data and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Dongil Metal
The main advantage of trading using opposite Daou Data and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data 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.| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
| Dongil Metal vs. Samlip General Foods | Dongil Metal vs. Samyang Foods Co | Dongil Metal vs. Sempio Foods Co | Dongil Metal vs. CJ Seafood 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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