Correlation Between Dongil Technology and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both Dongil Technology and Hannong Chemicals 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 Dongil Technology and Hannong Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Technology and Hannong Chemicals, you can compare the effects of market volatilities on Dongil Technology and Hannong Chemicals 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 Dongil Technology with a short position of Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Technology and Hannong Chemicals.
Diversification Opportunities for Dongil Technology and Hannong Chemicals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongil and Hannong is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Technology and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals and Dongil Technology 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 Dongil Technology are associated (or correlated) with Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of Dongil Technology i.e., Dongil Technology and Hannong Chemicals go up and down completely randomly.
Pair Corralation between Dongil Technology and Hannong Chemicals
Assuming the 90 days trading horizon Dongil Technology is expected to generate 24.12 times less return on investment than Hannong Chemicals. But when comparing it to its historical volatility, Dongil Technology is 6.29 times less risky than Hannong Chemicals. It trades about 0.1 of its potential returns per unit of risk. Hannong Chemicals is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,369,000 in Hannong Chemicals on November 27, 2024 and sell it today you would earn a total of 525,000 from holding Hannong Chemicals or generate 38.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Technology vs. Hannong Chemicals
Performance |
| Timeline |
| Dongil Technology |
| Hannong Chemicals |
Dongil Technology and Hannong Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Technology and Hannong Chemicals
The main advantage of trading using opposite Dongil Technology and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Technology position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.| Dongil Technology vs. Hyundai Industrial Co | Dongil Technology vs. Cheryong Industrial CoLtd | Dongil Technology vs. Hyunwoo Industrial Co | Dongil Technology vs. Automobile Pc |
| Hannong Chemicals vs. GS Retail Co | Hannong Chemicals vs. Cloud Air CoLtd | Hannong Chemicals vs. MediaZen | Hannong Chemicals vs. Nasmedia Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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