Correlation Between Dongwoo Farm and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Dongwoo Farm and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Taegu Broadcasting.
Diversification Opportunities for Dongwoo Farm and Taegu Broadcasting
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongwoo and Taegu is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Taegu Broadcasting
Assuming the 90 days trading horizon Dongwoo Farm is expected to generate 3.81 times less return on investment than Taegu Broadcasting. But when comparing it to its historical volatility, Dongwoo Farm To is 2.91 times less risky than Taegu Broadcasting. It trades about 0.07 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 81,700 in Taegu Broadcasting on October 30, 2024 and sell it today you would earn a total of 3,000 from holding Taegu Broadcasting or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Taegu Broadcasting
Performance |
| Timeline |
| Dongwoo Farm To |
| Taegu Broadcasting |
Dongwoo Farm and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Taegu Broadcasting
The main advantage of trading using opposite Dongwoo Farm and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Dongwoo Farm vs. Orbitech Co | Dongwoo Farm vs. N2Tech Co | Dongwoo Farm vs. Nh Investment And | Dongwoo Farm vs. Korea Investment Holdings |
| Taegu Broadcasting vs. Busan Industrial Co | Taegu Broadcasting vs. Busan Ind | Taegu Broadcasting vs. RPBio Inc | Taegu Broadcasting vs. Finebesteel |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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