Correlation Between Dong A and Assems
Can any of the company-specific risk be diversified away by investing in both Dong A and Assems 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 Assems 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 Assems Inc, you can compare the effects of market volatilities on Dong A and Assems 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 Assems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Assems.
Diversification Opportunities for Dong A and Assems
Average diversification
The 3 months correlation between Dong and Assems is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Assems Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assems Inc 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 Assems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assems Inc has no effect on the direction of Dong A i.e., Dong A and Assems go up and down completely randomly.
Pair Corralation between Dong A and Assems
Assuming the 90 days trading horizon Dong A Steel Technology is expected to under-perform the Assems. In addition to that, Dong A is 1.21 times more volatile than Assems Inc. It trades about -0.02 of its total potential returns per unit of risk. Assems Inc is currently generating about 0.02 per unit of volatility. If you would invest 652,000 in Assems Inc on August 31, 2024 and sell it today you would earn a total of 28,000 from holding Assems Inc or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Dong A Steel Technology vs. Assems Inc
Performance |
| Timeline |
| Dong A Steel |
| Assems Inc |
Dong A and Assems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Assems
The main advantage of trading using opposite Dong A and Assems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Assems 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 Assems will offset losses from the drop in Assems' long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| Assems vs. Dongbu Steel Co | Assems vs. BooKook Steel Co | Assems vs. SK Telecom Co | Assems 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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