Correlation Between Dong A and Cuckoo Homesys
Can any of the company-specific risk be diversified away by investing in both Dong A and Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys Co, you can compare the effects of market volatilities on Dong A and Cuckoo Homesys 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 Cuckoo Homesys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Cuckoo Homesys.
Diversification Opportunities for Dong A and Cuckoo Homesys
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dong and Cuckoo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Cuckoo Homesys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Homesys 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 Cuckoo Homesys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Homesys has no effect on the direction of Dong A i.e., Dong A and Cuckoo Homesys go up and down completely randomly.
Pair Corralation between Dong A and Cuckoo Homesys
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 1.07 times more return on investment than Cuckoo Homesys. However, Dong A is 1.07 times more volatile than Cuckoo Homesys Co. It trades about 0.31 of its potential returns per unit of risk. Cuckoo Homesys Co is currently generating about 0.13 per unit of risk. If you would invest 277,483 in Dong A Steel Technology on October 11, 2024 and sell it today you would earn a total of 28,517 from holding Dong A Steel Technology or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Cuckoo Homesys Co
Performance |
| Timeline |
| Dong A Steel |
| Cuckoo Homesys |
Dong A and Cuckoo Homesys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Cuckoo Homesys
The main advantage of trading using opposite Dong A and Cuckoo Homesys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Cuckoo Homesys 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 Cuckoo Homesys will offset losses from the drop in Cuckoo Homesys' long position.| Dong A vs. DRB Industrial Co | Dong A vs. Daejung Chemicals Metals | Dong A vs. Hwasung Industrial Co | Dong A vs. Youngsin Metal Industrial |
| Cuckoo Homesys vs. Pyung Hwa Industrial | Cuckoo Homesys vs. Daejung Chemicals Metals | Cuckoo Homesys vs. Samhyun Steel Co | Cuckoo Homesys 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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