Correlation Between Dong A and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Dong A and KyungIn Electronics 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 Dong A and KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Steel Technology and KyungIn Electronics Co, you can compare the effects of market volatilities on Dong A and KyungIn Electronics 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 Dong A with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and KyungIn Electronics.
Diversification Opportunities for Dong A and KyungIn Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and KyungIn is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Dong A 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 Dong A Steel Technology are associated (or correlated) with KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Dong A i.e., Dong A and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Dong A and KyungIn Electronics
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 4.0 times more return on investment than KyungIn Electronics. However, Dong A is 4.0 times more volatile than KyungIn Electronics Co. It trades about 0.13 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about -0.51 per unit of risk. If you would invest 290,500 in Dong A Steel Technology on November 3, 2024 and sell it today you would earn a total of 13,000 from holding Dong A Steel Technology or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. KyungIn Electronics Co
Performance |
| Timeline |
| Dong A Steel |
| KyungIn Electronics |
Dong A and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and KyungIn Electronics
The main advantage of trading using opposite Dong A and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, KyungIn Electronics 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Dong A vs. DataSolution | Dong A vs. Daou Data Corp | Dong A vs. Korea Information Communications | Dong A vs. ABOV Semiconductor Co |
| KyungIn Electronics vs. PNC Technologies co | KyungIn Electronics vs. Lion Chemtech Co | KyungIn Electronics vs. Dongwoon Anatech Co | KyungIn Electronics vs. Mobile Appliance |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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