Correlation Between Dongbang Ship and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Dongbang Ship and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Daishin Information.
Diversification Opportunities for Dongbang Ship and Daishin Information
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongbang and Daishin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and Daishin Information go up and down completely randomly.
Pair Corralation between Dongbang Ship and Daishin Information
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 2.05 times more return on investment than Daishin Information. However, Dongbang Ship is 2.05 times more volatile than Daishin Information Communications. It trades about 0.04 of its potential returns per unit of risk. Daishin Information Communications is currently generating about -0.14 per unit of risk. If you would invest 305,000 in Dongbang Ship Machinery on August 25, 2024 and sell it today you would earn a total of 4,500 from holding Dongbang Ship Machinery or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. Daishin Information Communicat
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Daishin Information |
Dongbang Ship and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Daishin Information
The main advantage of trading using opposite Dongbang Ship and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Dongbang Ship vs. Samsung Electronics Co | Dongbang Ship vs. Samsung Electronics Co | Dongbang Ship vs. Hyundai Motor Co | Dongbang Ship vs. Hyundai Motor |
| Daishin Information vs. Korean Drug Co | Daishin Information vs. CU Tech Corp | Daishin Information vs. Ssangyong Information Communication | Daishin Information vs. Shinsegae Information Communication |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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