Correlation Between Dong A and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Dong A and Daewon Media 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 Daewon Media 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 Daewon Media Co, you can compare the effects of market volatilities on Dong A and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Daewon Media.
Diversification Opportunities for Dong A and Daewon Media
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dong and Daewon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Dong A i.e., Dong A and Daewon Media go up and down completely randomly.
Pair Corralation between Dong A and Daewon Media
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 1.61 times more return on investment than Daewon Media. However, Dong A is 1.61 times more volatile than Daewon Media Co. It trades about 0.02 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.02 per unit of risk. If you would invest 311,746 in Dong A Steel Technology on October 24, 2024 and sell it today you would earn a total of 2,754 from holding Dong A Steel Technology or generate 0.88% 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. Daewon Media Co
Performance |
| Timeline |
| Dong A Steel |
| Daewon Media |
Dong A and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Daewon Media
The main advantage of trading using opposite Dong A and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Dong A vs. Ssangyong Information Communication | Dong A vs. Iljin Display | Dong A vs. ABCO Electronics Co | Dong A vs. Nable Communications |
| Daewon Media vs. Daehan Steel | Daewon Media vs. Daechang Steel Co | Daewon Media vs. Dong A Steel Technology | Daewon Media vs. KT Submarine Telecom |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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