Correlation Between Dong A and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Dong A and Daol Investment 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 Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Dong A and Daol Investment 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Daol Investment.
Diversification Opportunities for Dong A and Daol Investment
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and Daol is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Dong A i.e., Dong A and Daol Investment go up and down completely randomly.
Pair Corralation between Dong A and Daol Investment
Assuming the 90 days trading horizon Dong A is expected to generate 1.82 times less return on investment than Daol Investment. But when comparing it to its historical volatility, Dong A Steel Technology is 3.14 times less risky than Daol Investment. It trades about 0.23 of its potential returns per unit of risk. Daol Investment Securities is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 263,000 in Daol Investment Securities on October 18, 2024 and sell it today you would earn a total of 28,000 from holding Daol Investment Securities or generate 10.65% 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. Daol Investment Securities
Performance |
| Timeline |
| Dong A Steel |
| Daol Investment Secu |
Dong A and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Daol Investment
The main advantage of trading using opposite Dong A and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| Daol Investment vs. Dong A Steel Technology | Daol Investment vs. Digital Imaging Technology | Daol Investment vs. Hwangkum Steel Technology | Daol Investment vs. Polaris Office Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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