Correlation Between Dongwoo Farm and N Citron
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Dongwoo Farm and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and N Citron.
Diversification Opportunities for Dongwoo Farm and N Citron
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongwoo and 101400 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and N Citron go up and down completely randomly.
Pair Corralation between Dongwoo Farm and N Citron
Assuming the 90 days trading horizon Dongwoo Farm To is expected to generate 0.56 times more return on investment than N Citron. However, Dongwoo Farm To is 1.79 times less risky than N Citron. It trades about -0.16 of its potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of risk. If you would invest 283,500 in Dongwoo Farm To on September 1, 2024 and sell it today you would lose (92,500) from holding Dongwoo Farm To or give up 32.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. N Citron
Performance |
| Timeline |
| Dongwoo Farm To |
| N Citron |
Dongwoo Farm and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and N Citron
The main advantage of trading using opposite Dongwoo Farm and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Busan Industrial Co | Dongwoo Farm vs. Busan Ind | Dongwoo Farm vs. Mirae Asset Daewoo |
| N Citron vs. Tuksu Engineering ConstructionLtd | N Citron vs. Dongwoo Farm To | N Citron vs. Korea Shipbuilding Offshore | N Citron vs. Seohee Construction Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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