Correlation Between Dongkuk Structures and SM Culture
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and SM Culture 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 SM Culture 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 SM Culture Contents, you can compare the effects of market volatilities on Dongkuk Structures and SM Culture 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 SM Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and SM Culture.
Diversification Opportunities for Dongkuk Structures and SM Culture
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongkuk and 048550 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and SM Culture Contents in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Culture Contents 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 SM Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Culture Contents has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and SM Culture go up and down completely randomly.
Pair Corralation between Dongkuk Structures and SM Culture
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to generate 1.0 times more return on investment than SM Culture. However, Dongkuk Structures Construction is 1.0 times less risky than SM Culture. It trades about -0.01 of its potential returns per unit of risk. SM Culture Contents is currently generating about -0.08 per unit of risk. If you would invest 247,000 in Dongkuk Structures Construction on October 25, 2024 and sell it today you would lose (11,000) from holding Dongkuk Structures Construction or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. SM Culture Contents
Performance |
| Timeline |
| Dongkuk Structures |
| SM Culture Contents |
Dongkuk Structures and SM Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and SM Culture
The main advantage of trading using opposite Dongkuk Structures and SM Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, SM Culture 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 SM Culture will offset losses from the drop in SM Culture's long position.| Dongkuk Structures vs. Korea Information Communications | Dongkuk Structures vs. Mobileleader CoLtd | Dongkuk Structures vs. Kbi Metal Co | Dongkuk Structures vs. GS Retail Co |
| SM Culture vs. Dongkuk Structures Construction | SM Culture vs. Shinhan Inverse Copper | SM Culture vs. Nam Hwa Construction | SM Culture vs. PJ Metal Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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