Correlation Between Dongkuk Structures and A Tech

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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

Dongkuk071670Diversified AwayDongkuk071670Diversified Away100%
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 Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Dongkuk Structures Constructio  vs.  A Tech Solution Co

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -25-20-15-10-50
JavaScript chart by amCharts 3.21.15100130 071670
       Timeline  
Dongkuk Structures 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Dongkuk Structures Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongkuk Structures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2,0002,1002,2002,3002,4002,5002,6002,700
A Tech Solution 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days A Tech Solution Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, A Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4,5005,0005,5006,0006,500

Dongkuk Structures and A Tech Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.51-3.38-2.24-1.11-0.01891.042.143.244.345.44 0.0350.0400.0450.050
JavaScript chart by amCharts 3.21.15100130 071670
       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.
The idea behind Dongkuk Structures Construction and A Tech Solution Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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