Correlation Between Dong A and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both Dong A and Chorokbaem Healthcare 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 Chorokbaem Healthcare 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 Chorokbaem Healthcare Co, you can compare the effects of market volatilities on Dong A and Chorokbaem Healthcare 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Chorokbaem Healthcare.
Diversification Opportunities for Dong A and Chorokbaem Healthcare
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dong and Chorokbaem is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of Dong A i.e., Dong A and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between Dong A and Chorokbaem Healthcare
Assuming the 90 days trading horizon Dong A is expected to generate 2.03 times less return on investment than Chorokbaem Healthcare. But when comparing it to its historical volatility, Dong A Steel Technology is 1.94 times less risky than Chorokbaem Healthcare. It trades about 0.09 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 29,500 in Chorokbaem Healthcare Co on November 8, 2024 and sell it today you would earn a total of 1,800 from holding Chorokbaem Healthcare Co or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| Dong A Steel |
| Chorokbaem Healthcare |
Dong A and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Chorokbaem Healthcare
The main advantage of trading using opposite Dong A and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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