Correlation Between UJU Electronics and Dong Il
Can any of the company-specific risk be diversified away by investing in both UJU Electronics and Dong Il 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 UJU Electronics and Dong Il into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UJU Electronics Co and Dong Il Steel, you can compare the effects of market volatilities on UJU Electronics and Dong Il 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 UJU Electronics with a short position of Dong Il. Check out your portfolio center. Please also check ongoing floating volatility patterns of UJU Electronics and Dong Il.
Diversification Opportunities for UJU Electronics and Dong Il
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UJU and Dong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UJU Electronics Co and Dong Il Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong Il Steel and UJU Electronics 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 UJU Electronics Co are associated (or correlated) with Dong Il. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong Il Steel has no effect on the direction of UJU Electronics i.e., UJU Electronics and Dong Il go up and down completely randomly.
Pair Corralation between UJU Electronics and Dong Il
Assuming the 90 days trading horizon UJU Electronics Co is expected to generate 1.5 times more return on investment than Dong Il. However, UJU Electronics is 1.5 times more volatile than Dong Il Steel. It trades about 0.0 of its potential returns per unit of risk. Dong Il Steel is currently generating about -0.05 per unit of risk. If you would invest 1,445,130 in UJU Electronics Co on September 12, 2024 and sell it today you would lose (188,130) from holding UJU Electronics Co or give up 13.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UJU Electronics Co vs. Dong Il Steel
Performance |
| Timeline |
| UJU Electronics |
| Dong Il Steel |
UJU Electronics and Dong Il Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UJU Electronics and Dong Il
The main advantage of trading using opposite UJU Electronics and Dong Il positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UJU Electronics position performs unexpectedly, Dong Il 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 Dong Il will offset losses from the drop in Dong Il's long position.| UJU Electronics vs. DataSolution | UJU Electronics vs. Shinsegae Information Communication | UJU Electronics vs. NICE Information Service | UJU Electronics vs. SV Investment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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