Correlation Between Dong A and Kyobo 3
Can any of the company-specific risk be diversified away by investing in both Dong A and Kyobo 3 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 Kyobo 3 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 Kyobo 3 SPAC, you can compare the effects of market volatilities on Dong A and Kyobo 3 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 Kyobo 3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Kyobo 3.
Diversification Opportunities for Dong A and Kyobo 3
Very good diversification
The 3 months correlation between Dong and Kyobo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Eltek and Kyobo 3 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyobo 3 SPAC 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 Kyobo 3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyobo 3 SPAC has no effect on the direction of Dong A i.e., Dong A and Kyobo 3 go up and down completely randomly.
Pair Corralation between Dong A and Kyobo 3
Assuming the 90 days trading horizon Dong A is expected to generate 17.21 times less return on investment than Kyobo 3. But when comparing it to its historical volatility, Dong A Eltek is 1.52 times less risky than Kyobo 3. It trades about 0.0 of its potential returns per unit of risk. Kyobo 3 SPAC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 48,400 in Kyobo 3 SPAC on November 2, 2024 and sell it today you would earn a total of 7,500 from holding Kyobo 3 SPAC or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.97% |
| Values | Daily Returns |
Dong A Eltek vs. Kyobo 3 SPAC
Performance |
| Timeline |
| Dong A Eltek |
| Kyobo 3 SPAC |
Dong A and Kyobo 3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Kyobo 3
The main advantage of trading using opposite Dong A and Kyobo 3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Kyobo 3 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 Kyobo 3 will offset losses from the drop in Kyobo 3's long position.| Dong A vs. Heungkuk Metaltech CoLtd | Dong A vs. Korean Drug Co | Dong A vs. Duksan Hi Metal | Dong A vs. GS Retail Co |
| Kyobo 3 vs. Sewoon Medical Co | Kyobo 3 vs. LG Household Healthcare | Kyobo 3 vs. Infinitt Healthcare Co | Kyobo 3 vs. Woori Technology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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