Correlation Between Dong A and TK Chemical
Can any of the company-specific risk be diversified away by investing in both Dong A and TK Chemical 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 TK Chemical 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 TK Chemical, you can compare the effects of market volatilities on Dong A and TK Chemical 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 TK Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and TK Chemical.
Diversification Opportunities for Dong A and TK Chemical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and 104480 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and TK Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TK Chemical 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 TK Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TK Chemical has no effect on the direction of Dong A i.e., Dong A and TK Chemical go up and down completely randomly.
Pair Corralation between Dong A and TK Chemical
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 3.08 times more return on investment than TK Chemical. However, Dong A is 3.08 times more volatile than TK Chemical. It trades about 0.11 of its potential returns per unit of risk. TK Chemical is currently generating about -0.29 per unit of risk. If you would invest 322,000 in Dong A Steel Technology on August 29, 2024 and sell it today you would earn a total of 29,500 from holding Dong A Steel Technology or generate 9.16% 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. TK Chemical
Performance |
| Timeline |
| Dong A Steel |
| TK Chemical |
Dong A and TK Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and TK Chemical
The main advantage of trading using opposite Dong A and TK Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, TK Chemical 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 TK Chemical will offset losses from the drop in TK Chemical's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| TK Chemical vs. KMH Hitech Co | TK Chemical vs. GemVaxKAEL CoLtd | TK Chemical vs. Busan Industrial Co | TK Chemical vs. Busan Ind |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |