Correlation Between Kaonmedia and Dongil Steel
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and Dongil Steel 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 Kaonmedia and Dongil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaonmedia Co and Dongil Steel Co, you can compare the effects of market volatilities on Kaonmedia and Dongil Steel 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 Kaonmedia with a short position of Dongil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and Dongil Steel.
Diversification Opportunities for Kaonmedia and Dongil Steel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kaonmedia and Dongil is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and Dongil Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Steel and Kaonmedia 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 Kaonmedia Co are associated (or correlated) with Dongil Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Steel has no effect on the direction of Kaonmedia i.e., Kaonmedia and Dongil Steel go up and down completely randomly.
Pair Corralation between Kaonmedia and Dongil Steel
Assuming the 90 days trading horizon Kaonmedia Co is expected to under-perform the Dongil Steel. But the stock apears to be less risky and, when comparing its historical volatility, Kaonmedia Co is 1.08 times less risky than Dongil Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Dongil Steel Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 189,000 in Dongil Steel Co on September 3, 2024 and sell it today you would lose (70,300) from holding Dongil Steel Co or give up 37.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. Dongil Steel Co
Performance |
| Timeline |
| Kaonmedia |
| Dongil Steel |
Kaonmedia and Dongil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and Dongil Steel
The main advantage of trading using opposite Kaonmedia and Dongil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, Dongil Steel 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 Steel will offset losses from the drop in Dongil Steel's long position.| Kaonmedia vs. Dongsin Engineering Construction | Kaonmedia vs. Doosan Fuel Cell | Kaonmedia vs. Daishin Balance 1 | Kaonmedia vs. Total Soft Bank |
| Dongil Steel vs. Korean Reinsurance Co | Dongil Steel vs. Dongbang Ship Machinery | Dongil Steel vs. Haitai Confectionery Foods | Dongil Steel vs. Seoam Machinery Industry |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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