Correlation Between Actoz Soft and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Actoz Soft and Dongwon Metal 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 Actoz Soft and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actoz Soft CoLtd and Dongwon Metal Co, you can compare the effects of market volatilities on Actoz Soft and Dongwon Metal 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 Actoz Soft with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actoz Soft and Dongwon Metal.
Diversification Opportunities for Actoz Soft and Dongwon Metal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Actoz and Dongwon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Actoz Soft CoLtd and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Actoz Soft 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 Actoz Soft CoLtd are associated (or correlated) with Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Actoz Soft i.e., Actoz Soft and Dongwon Metal go up and down completely randomly.
Pair Corralation between Actoz Soft and Dongwon Metal
Assuming the 90 days trading horizon Actoz Soft is expected to generate 1.49 times less return on investment than Dongwon Metal. In addition to that, Actoz Soft is 1.11 times more volatile than Dongwon Metal Co. It trades about 0.01 of its total potential returns per unit of risk. Dongwon Metal Co is currently generating about 0.02 per unit of volatility. If you would invest 100,464 in Dongwon Metal Co on September 12, 2024 and sell it today you would earn a total of 1,936 from holding Dongwon Metal Co or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Actoz Soft CoLtd vs. Dongwon Metal Co
Performance |
| Timeline |
| Actoz Soft CoLtd |
| Dongwon Metal |
Actoz Soft and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actoz Soft and Dongwon Metal
The main advantage of trading using opposite Actoz Soft and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actoz Soft position performs unexpectedly, Dongwon Metal 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 Metal will offset losses from the drop in Dongwon Metal's long position.| Actoz Soft vs. Nice Information Telecommunication | Actoz Soft vs. Sejong Telecom | Actoz Soft vs. Korea Information Communications | Actoz Soft vs. Ssangyong Information Communication |
| Dongwon Metal vs. Samsung Electronics Co | Dongwon Metal vs. Samsung Electronics Co | Dongwon Metal vs. SK Hynix | Dongwon Metal 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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