Correlation Between Dongbang Ship and Chorokbaem Healthcare
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship and Chorokbaem Healthcare 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 Chorokbaem Healthcare 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 Chorokbaem Healthcare Co, you can compare the effects of market volatilities on Dongbang Ship and Chorokbaem Healthcare 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 Chorokbaem Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Chorokbaem Healthcare.
Diversification Opportunities for Dongbang Ship and Chorokbaem Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongbang and Chorokbaem is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Chorokbaem Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorokbaem Healthcare 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 Chorokbaem Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorokbaem Healthcare has no effect on the direction of Dongbang Ship i.e., Dongbang Ship and Chorokbaem Healthcare go up and down completely randomly.
Pair Corralation between Dongbang Ship and Chorokbaem Healthcare
Assuming the 90 days trading horizon Dongbang Ship is expected to generate 3.15 times less return on investment than Chorokbaem Healthcare. But when comparing it to its historical volatility, Dongbang Ship Machinery is 1.87 times less risky than Chorokbaem Healthcare. It trades about 0.08 of its potential returns per unit of risk. Chorokbaem Healthcare Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 29,000 in Chorokbaem Healthcare Co on November 5, 2024 and sell it today you would earn a total of 2,700 from holding Chorokbaem Healthcare Co or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. Chorokbaem Healthcare Co
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Chorokbaem Healthcare |
Dongbang Ship and Chorokbaem Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Chorokbaem Healthcare
The main advantage of trading using opposite Dongbang Ship and Chorokbaem Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship position performs unexpectedly, Chorokbaem Healthcare 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 Chorokbaem Healthcare will offset losses from the drop in Chorokbaem Healthcare's long position.| Dongbang Ship vs. Lotte Data Communication | Dongbang Ship vs. Pan Entertainment Co | Dongbang Ship vs. Daishin Information Communications | Dongbang Ship vs. JYP Entertainment Corp |
| Chorokbaem Healthcare vs. Sajo Seafood | Chorokbaem Healthcare vs. Nice Information Telecommunication | Chorokbaem Healthcare vs. ECSTELECOM Co | Chorokbaem Healthcare vs. Handok Clean Tech |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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