Correlation Between Dongwoo Farm and Air Busan
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Dongwoo Farm and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Air Busan.
Diversification Opportunities for Dongwoo Farm and Air Busan
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongwoo and Air is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Air Busan go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Air Busan
Assuming the 90 days trading horizon Dongwoo Farm To is expected to generate 0.62 times more return on investment than Air Busan. However, Dongwoo Farm To is 1.61 times less risky than Air Busan. It trades about 0.06 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.15 per unit of risk. If you would invest 190,800 in Dongwoo Farm To on September 26, 2024 and sell it today you would earn a total of 3,200 from holding Dongwoo Farm To or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Air Busan Co
Performance |
| Timeline |
| Dongwoo Farm To |
| Air Busan |
Dongwoo Farm and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Air Busan
The main advantage of trading using opposite Dongwoo Farm and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Neo Cremar Co | Dongwoo Farm vs. Wing Yip Food | Dongwoo Farm vs. Wooyang 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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