Correlation Between Dong A and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Dong A and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Dong A and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Hansol Homedeco.
Diversification Opportunities for Dong A and Hansol Homedeco
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and Hansol is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Dong A i.e., Dong A and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Dong A and Hansol Homedeco
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 2.34 times more return on investment than Hansol Homedeco. However, Dong A is 2.34 times more volatile than Hansol Homedeco Co. It trades about 0.02 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.06 per unit of risk. If you would invest 346,500 in Dong A Steel Technology on August 25, 2024 and sell it today you would earn a total of 6,000 from holding Dong A Steel Technology or generate 1.73% 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. Hansol Homedeco Co
Performance |
| Timeline |
| Dong A Steel |
| Hansol Homedeco |
Dong A and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Hansol Homedeco
The main advantage of trading using opposite Dong A and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Daewoo SBI SPAC | Hansol Homedeco vs. Dream Security co | Hansol Homedeco vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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