Correlation Between Homecast CoLtd and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Dongil Metal 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 Homecast CoLtd and Dongil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Dongil Metal Co, you can compare the effects of market volatilities on Homecast CoLtd and Dongil Metal 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 Homecast CoLtd with a short position of Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Dongil Metal.
Diversification Opportunities for Homecast CoLtd and Dongil Metal
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Homecast and Dongil is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Dongil Metal go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Dongil Metal
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the Dongil Metal. In addition to that, Homecast CoLtd is 2.17 times more volatile than Dongil Metal Co. It trades about -0.1 of its total potential returns per unit of risk. Dongil Metal Co is currently generating about -0.11 per unit of volatility. If you would invest 823,000 in Dongil Metal Co on September 20, 2024 and sell it today you would lose (28,000) from holding Dongil Metal Co or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. Dongil Metal Co
Performance |
| Timeline |
| Homecast CoLtd |
| Dongil Metal |
Homecast CoLtd and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and Dongil Metal
The main advantage of trading using opposite Homecast CoLtd and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Homecast CoLtd vs. Cube Entertainment | Homecast CoLtd vs. Dreamus Company | Homecast CoLtd vs. LG Energy Solution | Homecast CoLtd vs. Dongwon System |
| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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