Correlation Between Atec and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Atec and Dongsin Engineering 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 Atec and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atec Co and Dongsin Engineering Construction, you can compare the effects of market volatilities on Atec and Dongsin Engineering 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 Atec with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atec and Dongsin Engineering.
Diversification Opportunities for Atec and Dongsin Engineering
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Atec and Dongsin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Atec Co and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Atec 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 Atec Co are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Atec i.e., Atec and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Atec and Dongsin Engineering
Assuming the 90 days trading horizon Atec is expected to generate 1.14 times less return on investment than Dongsin Engineering. But when comparing it to its historical volatility, Atec Co is 1.08 times less risky than Dongsin Engineering. It trades about 0.28 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,140,000 in Dongsin Engineering Construction on September 12, 2024 and sell it today you would earn a total of 4,440,000 from holding Dongsin Engineering Construction or generate 207.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atec Co vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Atec |
| Dongsin Engineering |
Atec and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atec and Dongsin Engineering
The main advantage of trading using opposite Atec and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atec position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| Atec vs. Sunny Electronics Corp | Atec vs. Daeduck Electronics Co | Atec vs. Hankook Steel Co | Atec vs. Derkwoo Electronics Co |
| Dongsin Engineering vs. Ssangyong Information Communication | Dongsin Engineering vs. Korea Computer | Dongsin Engineering vs. Nice Information Telecommunication | Dongsin Engineering vs. Husteel |
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.
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