Correlation Between Dongwoo Farm and Showbox Corp
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Showbox Corp 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 Showbox Corp 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 Showbox Corp, you can compare the effects of market volatilities on Dongwoo Farm and Showbox Corp 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 Showbox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Showbox Corp.
Diversification Opportunities for Dongwoo Farm and Showbox Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwoo and Showbox is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Showbox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Showbox Corp 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 Showbox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Showbox Corp has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Showbox Corp go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Showbox Corp
Assuming the 90 days trading horizon Dongwoo Farm To is expected to generate 0.22 times more return on investment than Showbox Corp. However, Dongwoo Farm To is 4.65 times less risky than Showbox Corp. It trades about 0.14 of its potential returns per unit of risk. Showbox Corp is currently generating about -0.31 per unit of risk. If you would invest 190,997 in Dongwoo Farm To on October 25, 2024 and sell it today you would earn a total of 4,503 from holding Dongwoo Farm To or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Showbox Corp
Performance |
| Timeline |
| Dongwoo Farm To |
| Showbox Corp |
Dongwoo Farm and Showbox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Showbox Corp
The main advantage of trading using opposite Dongwoo Farm and Showbox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Showbox Corp 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 Showbox Corp will offset losses from the drop in Showbox Corp'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 |
| Showbox Corp vs. Eagon Industrial Co | Showbox Corp vs. DRB Industrial Co | Showbox Corp vs. Hotel Shilla Co | Showbox Corp vs. Grand Korea Leisure |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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