Correlation Between Dong A and MS Autotech
Can any of the company-specific risk be diversified away by investing in both Dong A and MS Autotech 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 Dong A and MS Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Eltek and MS Autotech CoLtd, you can compare the effects of market volatilities on Dong A and MS Autotech 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 Dong A with a short position of MS Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and MS Autotech.
Diversification Opportunities for Dong A and MS Autotech
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dong and 123040 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Eltek and MS Autotech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MS Autotech CoLtd and Dong A 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 Dong A Eltek are associated (or correlated) with MS Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MS Autotech CoLtd has no effect on the direction of Dong A i.e., Dong A and MS Autotech go up and down completely randomly.
Pair Corralation between Dong A and MS Autotech
Assuming the 90 days trading horizon Dong A Eltek is expected to generate 1.5 times more return on investment than MS Autotech. However, Dong A is 1.5 times more volatile than MS Autotech CoLtd. It trades about 0.0 of its potential returns per unit of risk. MS Autotech CoLtd is currently generating about -0.04 per unit of risk. If you would invest 434,636 in Dong A Eltek on November 27, 2024 and sell it today you would lose (92,636) from holding Dong A Eltek or give up 21.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Eltek vs. MS Autotech CoLtd
Performance |
| Timeline |
| Dong A Eltek |
| MS Autotech CoLtd |
Dong A and MS Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and MS Autotech
The main advantage of trading using opposite Dong A and MS Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, MS Autotech 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 MS Autotech will offset losses from the drop in MS Autotech's long position.The idea behind Dong A Eltek and MS Autotech CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Naver | MS Autotech vs. SK Hynix |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |