Correlation Between Dongkuk Structures and Taekwang Ind
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and Taekwang Ind 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 Dongkuk Structures and Taekwang Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongkuk Structures Construction and Taekwang Ind, you can compare the effects of market volatilities on Dongkuk Structures and Taekwang Ind 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 Dongkuk Structures with a short position of Taekwang Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and Taekwang Ind.
Diversification Opportunities for Dongkuk Structures and Taekwang Ind
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongkuk and Taekwang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and Taekwang Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taekwang Ind and Dongkuk Structures 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 Dongkuk Structures Construction are associated (or correlated) with Taekwang Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taekwang Ind has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and Taekwang Ind go up and down completely randomly.
Pair Corralation between Dongkuk Structures and Taekwang Ind
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the Taekwang Ind. In addition to that, Dongkuk Structures is 1.63 times more volatile than Taekwang Ind. It trades about -0.03 of its total potential returns per unit of risk. Taekwang Ind is currently generating about -0.02 per unit of volatility. If you would invest 65,000,000 in Taekwang Ind on October 26, 2024 and sell it today you would lose (1,800,000) from holding Taekwang Ind or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. Taekwang Ind
Performance |
| Timeline |
| Dongkuk Structures |
| Taekwang Ind |
Dongkuk Structures and Taekwang Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and Taekwang Ind
The main advantage of trading using opposite Dongkuk Structures and Taekwang Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, Taekwang Ind 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 Taekwang Ind will offset losses from the drop in Taekwang Ind's long position.| Dongkuk Structures vs. Bookook Steel | Dongkuk Structures vs. A Tech Solution Co | Dongkuk Structures vs. Finebesteel | Dongkuk Structures vs. Hyundai BNG Steel |
| Taekwang Ind vs. Handok Clean Tech | Taekwang Ind vs. SEOJEON ELECTRIC MACHINERY | Taekwang Ind vs. Clean Science co | Taekwang Ind vs. CG Hi 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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