Correlation Between BYON and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both BYON and Dongbang Ship 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 BYON and Dongbang Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYON Co and Dongbang Ship Machinery, you can compare the effects of market volatilities on BYON and Dongbang Ship 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 BYON with a short position of Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYON and Dongbang Ship.
Diversification Opportunities for BYON and Dongbang Ship
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYON and Dongbang is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BYON Co and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery and BYON 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 BYON Co are associated (or correlated) with Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of BYON i.e., BYON and Dongbang Ship go up and down completely randomly.
Pair Corralation between BYON and Dongbang Ship
Assuming the 90 days trading horizon BYON Co is expected to generate 1.91 times more return on investment than Dongbang Ship. However, BYON is 1.91 times more volatile than Dongbang Ship Machinery. It trades about 0.24 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about -0.03 per unit of risk. If you would invest 62,000 in BYON Co on September 1, 2024 and sell it today you would earn a total of 21,000 from holding BYON Co or generate 33.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BYON Co vs. Dongbang Ship Machinery
Performance |
| Timeline |
| BYON |
| Dongbang Ship Machinery |
BYON and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYON and Dongbang Ship
The main advantage of trading using opposite BYON and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYON position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.The idea behind BYON Co and Dongbang Ship Machinery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dongbang Ship vs. Korea New Network | Dongbang Ship vs. ICD Co | Dongbang Ship vs. DYPNF CoLtd | Dongbang Ship vs. Busan Industrial 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |