Correlation Between Tokai Carbon and Dongwoon Anatech
Can any of the company-specific risk be diversified away by investing in both Tokai Carbon and Dongwoon Anatech 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 Tokai Carbon and Dongwoon Anatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokai Carbon Korea and Dongwoon Anatech Co, you can compare the effects of market volatilities on Tokai Carbon and Dongwoon Anatech 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 Tokai Carbon with a short position of Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokai Carbon and Dongwoon Anatech.
Diversification Opportunities for Tokai Carbon and Dongwoon Anatech
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tokai and Dongwoon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tokai Carbon Korea and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech and Tokai Carbon 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 Tokai Carbon Korea are associated (or correlated) with Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Tokai Carbon i.e., Tokai Carbon and Dongwoon Anatech go up and down completely randomly.
Pair Corralation between Tokai Carbon and Dongwoon Anatech
Assuming the 90 days trading horizon Tokai Carbon is expected to generate 6.45 times less return on investment than Dongwoon Anatech. But when comparing it to its historical volatility, Tokai Carbon Korea is 2.23 times less risky than Dongwoon Anatech. It trades about 0.07 of its potential returns per unit of risk. Dongwoon Anatech Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,597,066 in Dongwoon Anatech Co on September 29, 2024 and sell it today you would earn a total of 250,934 from holding Dongwoon Anatech Co or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tokai Carbon Korea vs. Dongwoon Anatech Co
Performance |
| Timeline |
| Tokai Carbon Korea |
| Dongwoon Anatech |
Tokai Carbon and Dongwoon Anatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokai Carbon and Dongwoon Anatech
The main advantage of trading using opposite Tokai Carbon and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokai Carbon position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.| Tokai Carbon vs. SK Hynix | Tokai Carbon vs. LX Semicon Co | Tokai Carbon vs. People Technology | Tokai Carbon vs. SIMMTECH Co |
| Dongwoon Anatech vs. Hanjoo Light Metal | Dongwoon Anatech vs. Homecast CoLtd | Dongwoon Anatech vs. Haesung Industrial Co | Dongwoon Anatech vs. Hyundai Home Shopping |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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