Correlation Between Wonbang Tech and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech 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 Wonbang Tech and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Dongbang Transport Logistics, you can compare the effects of market volatilities on Wonbang Tech 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 Wonbang Tech with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Dongbang Transport.
Diversification Opportunities for Wonbang Tech and Dongbang Transport
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wonbang and Dongbang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Wonbang Tech 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 Wonbang Tech Co 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 Wonbang Tech i.e., Wonbang Tech and Dongbang Transport go up and down completely randomly.
Pair Corralation between Wonbang Tech and Dongbang Transport
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Dongbang Transport. In addition to that, Wonbang Tech 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 228,500 in Dongbang Transport Logistics on October 17, 2024 and sell it today you would earn a total of 4,000 from holding Dongbang Transport Logistics or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Wonbang Tech |
| Dongbang Transport |
Wonbang Tech and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Dongbang Transport
The main advantage of trading using opposite Wonbang Tech and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech 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.| Wonbang Tech vs. Samyang Foods Co | Wonbang Tech vs. Shinsegae Food | Wonbang Tech vs. Alton Sports CoLtd | Wonbang Tech vs. Daishin Information Communications |
| Dongbang Transport vs. Formetal Co | Dongbang Transport vs. Heungkuk Metaltech CoLtd | Dongbang Transport vs. Daejung Chemicals Metals | Dongbang Transport vs. Osang Healthcare Co,Ltd |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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