Correlation Between IM CoLtd and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both IM CoLtd and Dongbang Transport 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 IM CoLtd and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IM CoLtd and Dongbang Transport Logistics, you can compare the effects of market volatilities on IM CoLtd and Dongbang Transport 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 IM CoLtd with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of IM CoLtd and Dongbang Transport.
Diversification Opportunities for IM CoLtd and Dongbang Transport
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 101390 and Dongbang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding IM CoLtd and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and IM CoLtd 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 IM CoLtd are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of IM CoLtd i.e., IM CoLtd and Dongbang Transport go up and down completely randomly.
Pair Corralation between IM CoLtd and Dongbang Transport
Assuming the 90 days trading horizon IM CoLtd is expected to under-perform the Dongbang Transport. In addition to that, IM CoLtd is 1.42 times more volatile than Dongbang Transport Logistics. It trades about -0.01 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about -0.01 per unit of volatility. If you would invest 291,000 in Dongbang Transport Logistics on September 12, 2024 and sell it today you would lose (87,000) from holding Dongbang Transport Logistics or give up 29.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IM CoLtd vs. Dongbang Transport Logistics
Performance |
| Timeline |
| IM CoLtd |
| Dongbang Transport |
IM CoLtd and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IM CoLtd and Dongbang Transport
The main advantage of trading using opposite IM CoLtd and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IM CoLtd position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| IM CoLtd vs. Cube Entertainment | IM CoLtd vs. Dreamus Company | IM CoLtd vs. LG Energy Solution | IM CoLtd vs. Dongwon System |
| Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. SK Hynix | Dongbang Transport vs. POSCO Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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