Correlation Between Dongkuk Structures and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on Dongkuk Structures and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and NewFlex Technology.
Diversification Opportunities for Dongkuk Structures and NewFlex Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongkuk and NewFlex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and NewFlex Technology go up and down completely randomly.
Pair Corralation between Dongkuk Structures and NewFlex Technology
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the NewFlex Technology. But the stock apears to be less risky and, when comparing its historical volatility, Dongkuk Structures Construction is 1.68 times less risky than NewFlex Technology. The stock trades about -0.05 of its potential returns per unit of risk. The NewFlex Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 757,000 in NewFlex Technology Co on October 29, 2024 and sell it today you would lose (249,000) from holding NewFlex Technology Co or give up 32.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. NewFlex Technology Co
Performance |
| Timeline |
| Dongkuk Structures |
| NewFlex Technology |
Dongkuk Structures and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and NewFlex Technology
The main advantage of trading using opposite Dongkuk Structures and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Dongkuk Structures vs. Samsung Electronics Co | Dongkuk Structures vs. Samsung Electronics Co | Dongkuk Structures vs. KB Financial Group | Dongkuk Structures vs. Shinhan Financial Group |
| NewFlex Technology vs. Dgb Financial | NewFlex Technology vs. Bookook Steel | NewFlex Technology vs. KB Financial Group | NewFlex Technology vs. Korea Alcohol Industrial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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