Correlation Between Dongbang Ship and SH Energy
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and SH Energy 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 SH Energy 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 SH Energy Chemical, you can compare the effects of market volatilities on Dongbang Ship and SH Energy 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 SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and SH Energy.
Diversification Opportunities for Dongbang Ship and SH Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and 002360 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical 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 SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and SH Energy go up and down completely randomly.
Pair Corralation between Dongbang Ship and SH Energy
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 1.43 times more return on investment than SH Energy. However, Dongbang Ship is 1.43 times more volatile than SH Energy Chemical. It trades about 0.13 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.06 per unit of risk. If you would invest 305,500 in Dongbang Ship Machinery on October 29, 2024 and sell it today you would earn a total of 16,500 from holding Dongbang Ship Machinery or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. SH Energy Chemical
Performance |
| Timeline |
| Dongbang Ship Machinery |
| SH Energy Chemical |
Dongbang Ship and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and SH Energy
The main advantage of trading using opposite Dongbang Ship and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Dongbang Ship vs. Lee Ku Industrial | Dongbang Ship vs. Jinro Distillers Co | Dongbang Ship vs. Lotte Data Communication | Dongbang Ship vs. GS Retail Co |
| SH Energy vs. Inzi Display CoLtd | SH Energy vs. Playgram Co | SH Energy vs. Jeju Semiconductor Corp | SH Energy vs. Hotel Shilla Co |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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