Correlation Between Partron and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Partron 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 Partron and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partron Co and Dongsin Engineering Construction, you can compare the effects of market volatilities on Partron 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 Partron with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partron and Dongsin Engineering.
Diversification Opportunities for Partron and Dongsin Engineering
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Partron and Dongsin is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Partron Co and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Partron 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 Partron Co 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 Partron i.e., Partron and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Partron and Dongsin Engineering
Assuming the 90 days trading horizon Partron Co is expected to generate 0.31 times more return on investment than Dongsin Engineering. However, Partron Co is 3.24 times less risky than Dongsin Engineering. It trades about -0.03 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about -0.02 per unit of risk. If you would invest 777,000 in Partron Co on September 3, 2024 and sell it today you would lose (55,000) from holding Partron Co or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Partron Co vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Partron |
| Dongsin Engineering |
Partron and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partron and Dongsin Engineering
The main advantage of trading using opposite Partron and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partron 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.| Partron vs. Dongsin Engineering Construction | Partron vs. Doosan Fuel Cell | Partron vs. Daishin Balance 1 | Partron vs. Total Soft Bank |
| Dongsin Engineering vs. DB Financial Investment | Dongsin Engineering vs. EBEST Investment Securities | Dongsin Engineering vs. Stic Investments | Dongsin Engineering vs. Sangsangin Investment Securities |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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