Correlation Between Pyung Hwa and Dong A
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on Pyung Hwa and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and Dong A.
Diversification Opportunities for Pyung Hwa and Dong A
Modest diversification
The 3 months correlation between Pyung and Dong is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and Dong A go up and down completely randomly.
Pair Corralation between Pyung Hwa and Dong A
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to generate 3.78 times more return on investment than Dong A. However, Pyung Hwa is 3.78 times more volatile than Dong A Steel Technology. It trades about 0.3 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about 0.07 per unit of risk. If you would invest 90,000 in Pyung Hwa Industrial on November 7, 2024 and sell it today you would earn a total of 37,700 from holding Pyung Hwa Industrial or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. Dong A Steel Technology
Performance |
| Timeline |
| Pyung Hwa Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Dong A Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pyung Hwa and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and Dong A
The main advantage of trading using opposite Pyung Hwa and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Pyung Hwa vs. Dongwoon Anatech Co | Pyung Hwa vs. Cots Technology Co | Pyung Hwa vs. Dongbang Transport Logistics | Pyung Hwa vs. Spolytech Co |
| Dong A vs. Korea Petro Chemical | Dong A vs. Shinhan Inverse Copper | Dong A vs. SH Energy Chemical | Dong A vs. Namhae Chemical |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |