Correlation Between Dong A and Genic
Can any of the company-specific risk be diversified away by investing in both Dong A and Genic 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 Genic 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 Genic Co, you can compare the effects of market volatilities on Dong A and Genic 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 Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Genic.
Diversification Opportunities for Dong A and Genic
Very good diversification
The 3 months correlation between Dong and Genic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic 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 Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of Dong A i.e., Dong A and Genic go up and down completely randomly.
Pair Corralation between Dong A and Genic
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.35 times more return on investment than Genic. However, Dong A Steel Technology is 2.86 times less risky than Genic. It trades about 0.36 of its potential returns per unit of risk. Genic Co is currently generating about 0.04 per unit of risk. If you would invest 285,500 in Dong A Steel Technology on October 30, 2024 and sell it today you would earn a total of 32,500 from holding Dong A Steel Technology or generate 11.38% 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. Genic Co
Performance |
| Timeline |
| Dong A Steel |
| Genic |
Dong A and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Genic
The main advantage of trading using opposite Dong A and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| Dong A vs. Hyundai Industrial Co | Dong A vs. Daesung Industrial Co | Dong A vs. Sung Bo Chemicals | Dong A vs. Pyung Hwa Industrial |
| Genic vs. AeroSpace Technology of | Genic vs. Hankuk Steel Wire | Genic vs. Korea Steel Co | Genic vs. Dong A Steel Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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