Correlation Between Jeong Moon and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Dongbang Transport 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 Jeong Moon and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and Dongbang Transport Logistics, you can compare the effects of market volatilities on Jeong Moon and Dongbang Transport 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 Jeong Moon with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Dongbang Transport.
Diversification Opportunities for Jeong Moon and Dongbang Transport
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeong and Dongbang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Jeong Moon i.e., Jeong Moon and Dongbang Transport go up and down completely randomly.
Pair Corralation between Jeong Moon and Dongbang Transport
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Dongbang Transport. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 1.72 times less risky than Dongbang Transport. The stock trades about -0.03 of its potential returns per unit of risk. The Dongbang Transport Logistics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 267,500 in Dongbang Transport Logistics on October 27, 2024 and sell it today you would lose (47,500) from holding Dongbang Transport Logistics or give up 17.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Jeong Moon Information |
| Dongbang Transport |
Jeong Moon and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Dongbang Transport
The main advantage of trading using opposite Jeong Moon and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Dongbang Transport 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 Transport will offset losses from the drop in Dongbang Transport's long position.| Jeong Moon vs. Samsung Electronics Co | Jeong Moon vs. Samsung Electronics Co | Jeong Moon vs. SK Hynix | Jeong Moon vs. HMM Co |
| Dongbang Transport vs. DSC Investment | Dongbang Transport vs. Tamul Multimedia Co | Dongbang Transport vs. Atinum Investment Co | Dongbang Transport vs. MediaZen |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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