Correlation Between A Tech and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both A Tech and Dongbang Ship 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 A Tech and Dongbang Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Tech Solution Co and Dongbang Ship Machinery, you can compare the effects of market volatilities on A Tech and Dongbang Ship 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 A Tech with a short position of Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of A Tech and Dongbang Ship.
Diversification Opportunities for A Tech and Dongbang Ship
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 071670 and Dongbang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding A Tech Solution Co and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery and A Tech 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 A Tech Solution Co are associated (or correlated) with Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of A Tech i.e., A Tech and Dongbang Ship go up and down completely randomly.
Pair Corralation between A Tech and Dongbang Ship
Assuming the 90 days trading horizon A Tech is expected to generate 4.22 times less return on investment than Dongbang Ship. In addition to that, A Tech is 1.01 times more volatile than Dongbang Ship Machinery. It trades about 0.03 of its total potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.12 per unit of volatility. If you would invest 281,000 in Dongbang Ship Machinery on October 30, 2024 and sell it today you would earn a total of 41,000 from holding Dongbang Ship Machinery or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
A Tech Solution Co vs. Dongbang Ship Machinery
Performance |
| Timeline |
| A Tech Solution |
| Dongbang Ship Machinery |
A Tech and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A Tech and Dongbang Ship
The main advantage of trading using opposite A Tech and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A Tech position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| A Tech vs. Samsung Electronics Co | A Tech vs. Samsung Electronics Co | A Tech vs. KB Financial Group | A Tech vs. Shinhan Financial Group |
| Dongbang Ship vs. Hanjin Transportation Co | Dongbang Ship vs. Hana Financial | Dongbang Ship vs. Incar Financial Service | Dongbang Ship vs. Dongbang Transport Logistics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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