Correlation Between Dong A and Cytogen
Can any of the company-specific risk be diversified away by investing in both Dong A and Cytogen 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 Cytogen 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 Cytogen, you can compare the effects of market volatilities on Dong A and Cytogen 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 Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Cytogen.
Diversification Opportunities for Dong A and Cytogen
Average diversification
The 3 months correlation between Dong and Cytogen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen 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 Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Dong A i.e., Dong A and Cytogen go up and down completely randomly.
Pair Corralation between Dong A and Cytogen
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 1.03 times more return on investment than Cytogen. However, Dong A is 1.03 times more volatile than Cytogen. It trades about 0.05 of its potential returns per unit of risk. Cytogen is currently generating about -0.28 per unit of risk. If you would invest 319,500 in Dong A Steel Technology on September 4, 2024 and sell it today you would earn a total of 10,500 from holding Dong A Steel Technology or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Cytogen
Performance |
| Timeline |
| Dong A Steel |
| Cytogen |
Dong A and Cytogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Cytogen
The main advantage of trading using opposite Dong A and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| Cytogen vs. Sejong Telecom | Cytogen vs. Shinhan Inverse Silver | Cytogen vs. HB Technology TD | Cytogen 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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