Correlation Between Dongwoo Farm and ATON
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and ATON 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 ATON 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 ATON Inc, you can compare the effects of market volatilities on Dongwoo Farm and ATON 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 ATON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and ATON.
Diversification Opportunities for Dongwoo Farm and ATON
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongwoo and ATON is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and ATON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATON Inc 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 ATON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATON Inc has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and ATON go up and down completely randomly.
Pair Corralation between Dongwoo Farm and ATON
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the ATON. But the stock apears to be less risky and, when comparing its historical volatility, Dongwoo Farm To is 4.52 times less risky than ATON. The stock trades about -0.06 of its potential returns per unit of risk. The ATON Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 417,500 in ATON Inc on September 12, 2024 and sell it today you would earn a total of 162,500 from holding ATON Inc or generate 38.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. ATON Inc
Performance |
| Timeline |
| Dongwoo Farm To |
| ATON Inc |
Dongwoo Farm and ATON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and ATON
The main advantage of trading using opposite Dongwoo Farm and ATON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, ATON 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 ATON will offset losses from the drop in ATON'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 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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