Correlation Between Pyung Hwa and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and Dongwon System 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 Pyung Hwa and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyung Hwa Industrial and Dongwon System, you can compare the effects of market volatilities on Pyung Hwa and Dongwon System 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 Pyung Hwa with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and Dongwon System.
Diversification Opportunities for Pyung Hwa and Dongwon System
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pyung and Dongwon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and Pyung Hwa 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 Pyung Hwa Industrial are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and Dongwon System go up and down completely randomly.
Pair Corralation between Pyung Hwa and Dongwon System
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to generate 3.73 times more return on investment than Dongwon System. However, Pyung Hwa is 3.73 times more volatile than Dongwon System. It trades about 0.28 of its potential returns per unit of risk. Dongwon System is currently generating about -0.14 per unit of risk. If you would invest 89,300 in Pyung Hwa Industrial on October 28, 2024 and sell it today you would earn a total of 38,300 from holding Pyung Hwa Industrial or generate 42.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. Dongwon System
Performance |
| Timeline |
| Pyung Hwa Industrial |
| Dongwon System |
Pyung Hwa and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and Dongwon System
The main advantage of trading using opposite Pyung Hwa and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Pyung Hwa vs. KB Financial Group | Pyung Hwa vs. Shinhan Financial Group | Pyung Hwa vs. Hana Financial | Pyung Hwa vs. Woori Financial Group |
| Dongwon System vs. Iljin Display | Dongwon System vs. Mobileleader CoLtd | Dongwon System vs. Korea Shipbuilding Offshore | Dongwon System vs. Automobile Pc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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