Correlation Between Okins Electronics and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Okins Electronics and Dongbang Transport 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 Okins Electronics and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okins Electronics Co and Dongbang Transport Logistics, you can compare the effects of market volatilities on Okins Electronics and Dongbang Transport 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 Okins Electronics with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okins Electronics and Dongbang Transport.
Diversification Opportunities for Okins Electronics and Dongbang Transport
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Okins and Dongbang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Okins Electronics Co and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Okins 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 Okins Electronics Co are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Okins Electronics i.e., Okins Electronics and Dongbang Transport go up and down completely randomly.
Pair Corralation between Okins Electronics and Dongbang Transport
Assuming the 90 days trading horizon Okins Electronics Co is expected to generate 2.33 times more return on investment than Dongbang Transport. However, Okins Electronics is 2.33 times more volatile than Dongbang Transport Logistics. It trades about 0.25 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.26 per unit of risk. If you would invest 457,000 in Okins Electronics Co on October 22, 2024 and sell it today you would earn a total of 58,000 from holding Okins Electronics Co or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okins Electronics Co vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Okins Electronics |
| Dongbang Transport |
Okins Electronics and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okins Electronics and Dongbang Transport
The main advantage of trading using opposite Okins Electronics and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okins Electronics position performs unexpectedly, Dongbang Transport 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 Transport will offset losses from the drop in Dongbang Transport's long position.| Okins Electronics vs. FoodNamoo | Okins Electronics vs. Kukdong Oil Chemicals | Okins Electronics vs. Miwon Chemical | Okins Electronics vs. Tae Kyung Chemical |
| Dongbang Transport vs. Seoul Electronics Telecom | Dongbang Transport vs. Playgram Co | Dongbang Transport vs. Okins Electronics Co | Dongbang Transport vs. Samyoung Electronics Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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