Correlation Between Dong A and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Dong A and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on Dong A and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Dongkuk Structures.
Diversification Opportunities for Dong A and Dongkuk Structures
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dong and Dongkuk is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Dong A i.e., Dong A and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Dong A and Dongkuk Structures
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.79 times more return on investment than Dongkuk Structures. However, Dong A Steel Technology is 1.27 times less risky than Dongkuk Structures. It trades about 0.22 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about 0.15 per unit of risk. If you would invest 292,925 in Dong A Steel Technology on October 14, 2024 and sell it today you would earn a total of 19,075 from holding Dong A Steel Technology or generate 6.51% 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. Dongkuk Structures Constructio
Performance |
| Timeline |
| Dong A Steel |
| Dongkuk Structures |
Dong A and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Dongkuk Structures
The main advantage of trading using opposite Dong A and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Dong A vs. GS Retail Co | Dong A vs. Air Busan Co | Dong A vs. Chorokbaem Healthcare Co | Dong A vs. ABOV Semiconductor Co |
| Dongkuk Structures vs. Dong A Steel Technology | Dongkuk Structures vs. Eagle Veterinary Technology | Dongkuk Structures vs. Hyundai Engineering Construction | Dongkuk Structures vs. Eugene Technology CoLtd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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