Correlation Between Dongbang Ship and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and Golden Bridge 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 Dongbang Ship and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Ship Machinery and Golden Bridge Investment, you can compare the effects of market volatilities on Dongbang Ship and Golden Bridge 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 Dongbang Ship with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Golden Bridge.
Diversification Opportunities for Dongbang Ship and Golden Bridge
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongbang and Golden is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Dongbang Ship 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 Dongbang Ship Machinery are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and Golden Bridge go up and down completely randomly.
Pair Corralation between Dongbang Ship and Golden Bridge
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 3.06 times more return on investment than Golden Bridge. However, Dongbang Ship is 3.06 times more volatile than Golden Bridge Investment. It trades about 0.14 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about 0.03 per unit of risk. If you would invest 303,500 in Dongbang Ship Machinery on October 28, 2024 and sell it today you would earn a total of 18,500 from holding Dongbang Ship Machinery or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. Golden Bridge Investment
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Golden Bridge Investment |
Dongbang Ship and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Golden Bridge
The main advantage of trading using opposite Dongbang Ship and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.| Dongbang Ship vs. Samsung Electronics Co | Dongbang Ship vs. Samsung Electronics Co | Dongbang Ship vs. KB Financial Group | Dongbang Ship vs. Shinhan Financial Group |
| Golden Bridge vs. KB Financial Group | Golden Bridge vs. Shinhan Financial Group | Golden Bridge vs. Hana Financial | Golden Bridge vs. Woori Financial Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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