Correlation Between Hankukpackage and Dong A
Can any of the company-specific risk be diversified away by investing in both Hankukpackage and Dong A 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 Hankukpackage and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hankukpackage Co and Dong A Eltek, you can compare the effects of market volatilities on Hankukpackage and Dong A 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 Hankukpackage with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hankukpackage and Dong A.
Diversification Opportunities for Hankukpackage and Dong A
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hankukpackage and Dong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hankukpackage Co and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek and Hankukpackage 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 Hankukpackage Co are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of Hankukpackage i.e., Hankukpackage and Dong A go up and down completely randomly.
Pair Corralation between Hankukpackage and Dong A
Assuming the 90 days trading horizon Hankukpackage Co is expected to generate 0.87 times more return on investment than Dong A. However, Hankukpackage Co is 1.16 times less risky than Dong A. It trades about -0.11 of its potential returns per unit of risk. Dong A Eltek is currently generating about -0.43 per unit of risk. If you would invest 174,900 in Hankukpackage Co on November 2, 2024 and sell it today you would lose (2,900) from holding Hankukpackage Co or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hankukpackage Co vs. Dong A Eltek
Performance |
| Timeline |
| Hankukpackage |
| Dong A Eltek |
Hankukpackage and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hankukpackage and Dong A
The main advantage of trading using opposite Hankukpackage and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hankukpackage position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Hankukpackage vs. Sangsangin Investment Securities | Hankukpackage vs. Formetal Co | Hankukpackage vs. Automobile Pc | Hankukpackage vs. Hanjoo Light Metal |
| Dong A vs. Heungkuk Metaltech CoLtd | Dong A vs. Korean Drug Co | Dong A vs. Duksan Hi Metal | Dong A vs. GS Retail 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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