Correlation Between Dongbang Ship and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals, you can compare the effects of market volatilities on Dongbang Ship and Hannong Chemicals 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 Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Hannong Chemicals.
Diversification Opportunities for Dongbang Ship and Hannong Chemicals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Hannong is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals 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 Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and Hannong Chemicals go up and down completely randomly.
Pair Corralation between Dongbang Ship and Hannong Chemicals
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate about the same return on investment as Hannong Chemicals. But, Dongbang Ship Machinery is 1.13 times less risky than Hannong Chemicals. It trades about 0.01 of its potential returns per unit of risk. Hannong Chemicals is currently generating about 0.01 per unit of risk. If you would invest 1,430,981 in Hannong Chemicals on October 17, 2024 and sell it today you would earn a total of 19.00 from holding Hannong Chemicals or generate 0.0% 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. Hannong Chemicals
Performance |
Timeline |
Dongbang Ship Machinery |
Hannong Chemicals |
Dongbang Ship and Hannong Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongbang Ship and Hannong Chemicals
The main advantage of trading using opposite Dongbang Ship and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.Dongbang Ship vs. Daou Data Corp | Dongbang Ship vs. Busan Industrial Co | Dongbang Ship vs. Busan Ind | Dongbang Ship vs. Mirae Asset Daewoo |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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