Correlation Between Dongwoo Farm and CBI
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and CBI 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 Dongwoo Farm and CBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and CBI Co, you can compare the effects of market volatilities on Dongwoo Farm and CBI 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 Dongwoo Farm with a short position of CBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and CBI.
Diversification Opportunities for Dongwoo Farm and CBI
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongwoo and CBI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and CBI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBI Co and Dongwoo Farm 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 Dongwoo Farm To are associated (or correlated) with CBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBI Co has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and CBI go up and down completely randomly.
Pair Corralation between Dongwoo Farm and CBI
Assuming the 90 days trading horizon Dongwoo Farm To is expected to generate 0.5 times more return on investment than CBI. However, Dongwoo Farm To is 2.0 times less risky than CBI. It trades about -0.12 of its potential returns per unit of risk. CBI Co is currently generating about -0.28 per unit of risk. If you would invest 196,900 in Dongwoo Farm To on September 12, 2024 and sell it today you would lose (9,800) from holding Dongwoo Farm To or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. CBI Co
Performance |
| Timeline |
| Dongwoo Farm To |
| CBI Co |
Dongwoo Farm and CBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and CBI
The main advantage of trading using opposite Dongwoo Farm and CBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, CBI 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 CBI will offset losses from the drop in CBI's long position.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. HYUNDAI FEED | Dongwoo Farm vs. Neo Cremar Co | Dongwoo Farm vs. Wing Yip Food |
| CBI vs. Hanshin Construction Co | CBI vs. Dongwoo Farm To | CBI vs. Samsung Life Insurance | CBI vs. Shinsegae Engineering Construction |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |