Correlation Between Dongwoo Farm and Neo Cremar
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Neo Cremar 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 Neo Cremar 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 Neo Cremar Co, you can compare the effects of market volatilities on Dongwoo Farm and Neo Cremar 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 Neo Cremar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Neo Cremar.
Diversification Opportunities for Dongwoo Farm and Neo Cremar
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongwoo and Neo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Neo Cremar Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Cremar 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 Neo Cremar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Cremar has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Neo Cremar go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Neo Cremar
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Neo Cremar. In addition to that, Dongwoo Farm is 1.8 times more volatile than Neo Cremar Co. It trades about -0.17 of its total potential returns per unit of risk. Neo Cremar Co is currently generating about 0.26 per unit of volatility. If you would invest 713,000 in Neo Cremar Co on August 29, 2024 and sell it today you would earn a total of 29,000 from holding Neo Cremar Co or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dongwoo Farm To vs. Neo Cremar Co
Performance |
| Timeline |
| Dongwoo Farm To |
| Neo Cremar |
Dongwoo Farm and Neo Cremar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Neo Cremar
The main advantage of trading using opposite Dongwoo Farm and Neo Cremar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Neo Cremar 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 Neo Cremar will offset losses from the drop in Neo Cremar's long position.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Busan Industrial Co | Dongwoo Farm vs. Busan Ind | Dongwoo Farm vs. Shinhan WTI Futures |
| Neo Cremar vs. KT Submarine Telecom | Neo Cremar vs. Shinsegae Information Communication | Neo Cremar vs. Sejong Telecom | Neo Cremar vs. DC Media 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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