Correlation Between Daewoo Shipbuilding and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Daewoo Shipbuilding 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 Daewoo Shipbuilding and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Shipbuilding and Dongbang Transport Logistics, you can compare the effects of market volatilities on Daewoo Shipbuilding 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 Daewoo Shipbuilding with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Shipbuilding and Dongbang Transport.
Diversification Opportunities for Daewoo Shipbuilding and Dongbang Transport
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and Dongbang is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Shipbuilding and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Daewoo Shipbuilding 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 Daewoo Shipbuilding 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 Daewoo Shipbuilding i.e., Daewoo Shipbuilding and Dongbang Transport go up and down completely randomly.
Pair Corralation between Daewoo Shipbuilding and Dongbang Transport
Assuming the 90 days trading horizon Daewoo Shipbuilding is expected to under-perform the Dongbang Transport. In addition to that, Daewoo Shipbuilding is 1.01 times more volatile than Dongbang Transport Logistics. It trades about -0.01 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.02 per unit of volatility. If you would invest 209,000 in Dongbang Transport Logistics on September 12, 2024 and sell it today you would lose (5,000) from holding Dongbang Transport Logistics or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Shipbuilding vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Daewoo Shipbuilding |
| Dongbang Transport |
Daewoo Shipbuilding and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Shipbuilding and Dongbang Transport
The main advantage of trading using opposite Daewoo Shipbuilding and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Shipbuilding 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.| Daewoo Shipbuilding vs. Dongbang Transport Logistics | Daewoo Shipbuilding vs. Sung Bo Chemicals | Daewoo Shipbuilding vs. V One Tech Co | Daewoo Shipbuilding vs. SK Chemicals Co |
| Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. SK Hynix | Dongbang Transport vs. POSCO Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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