Correlation Between ChipsMedia and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both ChipsMedia 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 ChipsMedia and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Dongsin Engineering Construction, you can compare the effects of market volatilities on ChipsMedia 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 ChipsMedia with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Dongsin Engineering.
Diversification Opportunities for ChipsMedia and Dongsin Engineering
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChipsMedia and Dongsin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and ChipsMedia 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 ChipsMedia 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 ChipsMedia i.e., ChipsMedia and Dongsin Engineering go up and down completely randomly.
Pair Corralation between ChipsMedia and Dongsin Engineering
Assuming the 90 days trading horizon ChipsMedia is expected to generate 2.24 times less return on investment than Dongsin Engineering. But when comparing it to its historical volatility, ChipsMedia is 1.28 times less risky than Dongsin Engineering. It trades about 0.05 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,318,042 in Dongsin Engineering Construction on September 13, 2024 and sell it today you would earn a total of 5,261,958 from holding Dongsin Engineering Construction or generate 399.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| ChipsMedia |
| Dongsin Engineering |
ChipsMedia and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Dongsin Engineering
The main advantage of trading using opposite ChipsMedia and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia 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.| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
| Dongsin Engineering vs. Naver | Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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