Correlation Between Dongbang Ship and BYON
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and BYON 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 BYON 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 BYON Co, you can compare the effects of market volatilities on Dongbang Ship and BYON 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 BYON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and BYON.
Diversification Opportunities for Dongbang Ship and BYON
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongbang and BYON is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and BYON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYON 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 BYON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYON has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and BYON go up and down completely randomly.
Pair Corralation between Dongbang Ship and BYON
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 0.58 times more return on investment than BYON. However, Dongbang Ship Machinery is 1.71 times less risky than BYON. It trades about 0.08 of its potential returns per unit of risk. BYON Co is currently generating about -0.01 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. BYON Co
Performance |
| Timeline |
| Dongbang Ship Machinery |
| BYON |
Dongbang Ship and BYON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and BYON
The main advantage of trading using opposite Dongbang Ship and BYON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, BYON 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 BYON will offset losses from the drop in BYON'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 |
| BYON vs. Dongbang Ship Machinery | BYON vs. Camus Engineering Construction | BYON vs. ABOV Semiconductor Co | BYON vs. Alton Sports CoLtd |
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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