Correlation Between Sang A and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Sang A and Dongsin Engineering 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 Sang A and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sang A Frontec CoLtd and Dongsin Engineering Construction, you can compare the effects of market volatilities on Sang A and Dongsin Engineering 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 Sang A with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sang A and Dongsin Engineering.
Diversification Opportunities for Sang A and Dongsin Engineering
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sang and Dongsin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sang A Frontec CoLtd and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Sang A 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 Sang A Frontec CoLtd are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Sang A i.e., Sang A and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Sang A and Dongsin Engineering
Assuming the 90 days trading horizon Sang A Frontec CoLtd is expected to under-perform the Dongsin Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Sang A Frontec CoLtd is 5.74 times less risky than Dongsin Engineering. The stock trades about -0.03 of its potential returns per unit of risk. The Dongsin Engineering Construction is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,040,000 in Dongsin Engineering Construction on September 25, 2024 and sell it today you would earn a total of 2,460,000 from holding Dongsin Engineering Construction or generate 120.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Sang A Frontec CoLtd vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Sang A Frontec |
| Dongsin Engineering |
Sang A and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sang A and Dongsin Engineering
The main advantage of trading using opposite Sang A and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sang A position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| Sang A vs. Sangshin Electronics Co | Sang A vs. Daewon Media Co | Sang A vs. FNC Entertainment Co | Sang A vs. Shinil Electronics Co |
| Dongsin Engineering vs. Global Standard Technology | Dongsin Engineering vs. Jb Financial | Dongsin Engineering vs. Eagle Veterinary Technology | Dongsin Engineering vs. Eugene Technology CoLtd |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |