Correlation Between ABOV Semiconductor and Dongwon System
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and Dongwon System 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 ABOV Semiconductor and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and Dongwon System, you can compare the effects of market volatilities on ABOV Semiconductor and Dongwon System 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 ABOV Semiconductor with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Dongwon System.
Diversification Opportunities for ABOV Semiconductor and Dongwon System
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between ABOV and Dongwon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and ABOV Semiconductor 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 ABOV Semiconductor Co are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and Dongwon System go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Dongwon System
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 1.34 times more return on investment than Dongwon System. However, ABOV Semiconductor is 1.34 times more volatile than Dongwon System. It trades about 0.02 of its potential returns per unit of risk. Dongwon System is currently generating about 0.02 per unit of risk. If you would invest 820,217 in ABOV Semiconductor Co on September 13, 2024 and sell it today you would lose (70,217) from holding ABOV Semiconductor Co or give up 8.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Dongwon System
Performance |
| Timeline |
| ABOV Semiconductor |
| Dongwon System |
ABOV Semiconductor and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Dongwon System
The main advantage of trading using opposite ABOV Semiconductor and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| ABOV Semiconductor vs. Cube Entertainment | ABOV Semiconductor vs. Dreamus Company | ABOV Semiconductor vs. LG Energy Solution | ABOV Semiconductor vs. Dongwon System |
| Dongwon System vs. ABOV Semiconductor Co | Dongwon System vs. BGF Retail Co | Dongwon System vs. Seoul Semiconductor Co | Dongwon System vs. ITM Semiconductor Co |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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