Correlation Between Dongkuk Structures and Alchera
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and Alchera 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 Alchera 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 Alchera, you can compare the effects of market volatilities on Dongkuk Structures and Alchera 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 Alchera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and Alchera.
Diversification Opportunities for Dongkuk Structures and Alchera
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongkuk and Alchera is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and Alchera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchera 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 Alchera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchera has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and Alchera go up and down completely randomly.
Pair Corralation between Dongkuk Structures and Alchera
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the Alchera. But the stock apears to be less risky and, when comparing its historical volatility, Dongkuk Structures Construction is 2.15 times less risky than Alchera. The stock trades about -0.05 of its potential returns per unit of risk. The Alchera is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 713,000 in Alchera on September 3, 2024 and sell it today you would lose (515,600) from holding Alchera or give up 72.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. Alchera
Performance |
| Timeline |
| Dongkuk Structures |
| Alchera |
Dongkuk Structures and Alchera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and Alchera
The main advantage of trading using opposite Dongkuk Structures and Alchera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, Alchera 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 Alchera will offset losses from the drop in Alchera's long position.| Dongkuk Structures vs. LG Display | Dongkuk Structures vs. Hyundai Motor | Dongkuk Structures vs. Hyundai Motor Co | Dongkuk Structures vs. Hyundai Motor Co |
| Alchera vs. InfoBank | Alchera vs. Tuksu Engineering ConstructionLtd | Alchera vs. Nam Hwa Construction | Alchera vs. Dongkuk Structures Construction |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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