Correlation Between Dongbang Ship and Tuksu Engineering
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and Tuksu 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 Dongbang Ship and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd, you can compare the effects of market volatilities on Dongbang Ship and Tuksu 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 Dongbang Ship with a short position of Tuksu Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Tuksu Engineering.
Diversification Opportunities for Dongbang Ship and Tuksu Engineering
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongbang and Tuksu is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Tuksu Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuksu Engineering 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 Tuksu Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuksu Engineering has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and Tuksu Engineering go up and down completely randomly.
Pair Corralation between Dongbang Ship and Tuksu Engineering
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 0.85 times more return on investment than Tuksu Engineering. However, Dongbang Ship Machinery is 1.17 times less risky than Tuksu Engineering. It trades about 0.08 of its potential returns per unit of risk. Tuksu Engineering ConstructionLtd is currently generating about -0.02 per unit of risk. If you would invest 246,000 in Dongbang Ship Machinery on August 29, 2024 and sell it today you would earn a total of 59,000 from holding Dongbang Ship Machinery or generate 23.98% 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. Tuksu Engineering Construction
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Tuksu Engineering |
Dongbang Ship and Tuksu Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Tuksu Engineering
The main advantage of trading using opposite Dongbang Ship and Tuksu Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, Tuksu 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 Tuksu Engineering will offset losses from the drop in Tuksu Engineering's long position.| Dongbang Ship vs. Koryo Credit Information | Dongbang Ship vs. Sungdo Engineering Construction | Dongbang Ship vs. Nice Information Telecommunication | Dongbang Ship vs. Shinsegae Information Communication |
| Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Samsung Electronics Co | Tuksu Engineering vs. Hyundai Motor Co | Tuksu Engineering vs. Hyundai Motor |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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