Correlation Between Koryo Credit and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Dongwon System 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 Koryo Credit and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and Dongwon System, you can compare the effects of market volatilities on Koryo Credit and Dongwon System 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 Koryo Credit with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Dongwon System.
Diversification Opportunities for Koryo Credit and Dongwon System
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koryo and Dongwon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and Koryo Credit 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 Koryo Credit Information are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Koryo Credit i.e., Koryo Credit and Dongwon System go up and down completely randomly.
Pair Corralation between Koryo Credit and Dongwon System
Assuming the 90 days trading horizon Koryo Credit is expected to generate 6.64 times less return on investment than Dongwon System. But when comparing it to its historical volatility, Koryo Credit Information is 2.17 times less risky than Dongwon System. It trades about 0.01 of its potential returns per unit of risk. Dongwon System is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,822,635 in Dongwon System on September 20, 2024 and sell it today you would earn a total of 432,365 from holding Dongwon System or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Dongwon System
Performance |
| Timeline |
| Koryo Credit Information |
| Dongwon System |
Koryo Credit and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Dongwon System
The main advantage of trading using opposite Koryo Credit and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Koryo Credit vs. Woorim Machinery Co | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Hanshin Construction Co | Koryo Credit vs. Dongkuk Structures Construction |
| Dongwon System vs. Nable Communications | Dongwon System vs. Shinsegae Information Communication | Dongwon System vs. Ssangyong Information Communication | Dongwon System vs. Koryo Credit Information |
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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