Correlation Between Dong A and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Dong A and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Dong A and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Daishin Information.
Diversification Opportunities for Dong A and Daishin Information
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dong and Daishin is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Dong A i.e., Dong A and Daishin Information go up and down completely randomly.
Pair Corralation between Dong A and Daishin Information
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.51 times more return on investment than Daishin Information. However, Dong A Steel Technology is 1.97 times less risky than Daishin Information. It trades about 0.36 of its potential returns per unit of risk. Daishin Information Communications is currently generating about 0.11 per unit of risk. If you would invest 285,500 in Dong A Steel Technology on October 30, 2024 and sell it today you would earn a total of 32,500 from holding Dong A Steel Technology or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Daishin Information Communicat
Performance |
| Timeline |
| Dong A Steel |
| Daishin Information |
Dong A and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Daishin Information
The main advantage of trading using opposite Dong A and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Dong A vs. Hyundai Industrial Co | Dong A vs. Daesung Industrial Co | Dong A vs. Sung Bo Chemicals | Dong A vs. Pyung Hwa Industrial |
| Daishin Information vs. Vina Technology Co | Daishin Information vs. HB Technology TD | Daishin Information vs. Hotel Shilla Co | Daishin Information vs. Nable Communications |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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