Correlation Between Dongkuk Structures and A Tech
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and A Tech 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 A Tech 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 A Tech Solution Co, you can compare the effects of market volatilities on Dongkuk Structures and A Tech 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 A Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and A Tech.
Diversification Opportunities for Dongkuk Structures and A Tech
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongkuk and 071670 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and A Tech Solution Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Tech Solution 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 A Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Tech Solution has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and A Tech go up and down completely randomly.
Pair Corralation between Dongkuk Structures and A Tech
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the A Tech. But the stock apears to be less risky and, when comparing its historical volatility, Dongkuk Structures Construction is 1.15 times less risky than A Tech. The stock trades about -0.05 of its potential returns per unit of risk. The A Tech Solution Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,042,000 in A Tech Solution Co on October 31, 2024 and sell it today you would lose (450,000) from holding A Tech Solution Co or give up 43.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dongkuk Structures Constructio vs. A Tech Solution Co
Performance |
Timeline |
Dongkuk Structures |
A Tech Solution |
Dongkuk Structures and A Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongkuk Structures and A Tech
The main advantage of trading using opposite Dongkuk Structures and A Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, A Tech 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 A Tech will offset losses from the drop in A Tech's long position.Dongkuk Structures vs. Samsung Electronics Co | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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