Correlation Between Dongil Technology and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both Dongil Technology and GaeaSoft Corp 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 GaeaSoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Technology and GaeaSoft Corp, you can compare the effects of market volatilities on Dongil Technology and GaeaSoft Corp 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 GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Technology and GaeaSoft Corp.
Diversification Opportunities for Dongil Technology and GaeaSoft Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongil and GaeaSoft is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Technology and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp 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 GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of Dongil Technology i.e., Dongil Technology and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between Dongil Technology and GaeaSoft Corp
Assuming the 90 days trading horizon Dongil Technology is expected to generate 2.49 times less return on investment than GaeaSoft Corp. But when comparing it to its historical volatility, Dongil Technology is 1.37 times less risky than GaeaSoft Corp. It trades about 0.01 of its potential returns per unit of risk. GaeaSoft Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 913,000 in GaeaSoft Corp on September 3, 2024 and sell it today you would lose (58,000) from holding GaeaSoft Corp or give up 6.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Technology vs. GaeaSoft Corp
Performance |
| Timeline |
| Dongil Technology |
| GaeaSoft Corp |
Dongil Technology and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Technology and GaeaSoft Corp
The main advantage of trading using opposite Dongil Technology and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Technology position performs unexpectedly, GaeaSoft Corp 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp's long position.| Dongil Technology vs. Dongsin Engineering Construction | Dongil Technology vs. Doosan Fuel Cell | Dongil Technology vs. Daishin Balance 1 | Dongil Technology vs. Total Soft Bank |
| GaeaSoft Corp vs. Dongil Technology | GaeaSoft Corp vs. KG Eco Technology | GaeaSoft Corp vs. DB Financial Investment | GaeaSoft Corp vs. Puloon Technology |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |