Correlation Between ABOV Semiconductor and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and Dongil 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 ABOV Semiconductor and Dongil Technology 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 Dongil Technology, you can compare the effects of market volatilities on ABOV Semiconductor and Dongil 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 ABOV Semiconductor with a short position of Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Dongil Technology.
Diversification Opportunities for ABOV Semiconductor and Dongil Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABOV and Dongil is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and Dongil Technology go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Dongil Technology
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to under-perform the Dongil Technology. In addition to that, ABOV Semiconductor is 3.02 times more volatile than Dongil Technology. It trades about -0.3 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.25 per unit of volatility. If you would invest 1,108,000 in Dongil Technology on August 30, 2024 and sell it today you would lose (58,000) from holding Dongil Technology or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Dongil Technology
Performance |
| Timeline |
| ABOV Semiconductor |
| Dongil Technology |
ABOV Semiconductor and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Dongil Technology
The main advantage of trading using opposite ABOV Semiconductor and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, Dongil 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| ABOV Semiconductor vs. Dongbang Ship Machinery | ABOV Semiconductor vs. HJ ShipBuilding Construction | ABOV Semiconductor vs. Hanmi Semiconductor Co | ABOV Semiconductor vs. Tuksu Engineering ConstructionLtd |
| Dongil Technology vs. Daou Data Corp | Dongil Technology vs. Busan Industrial Co | Dongil Technology vs. Busan Ind | Dongil Technology vs. Shinhan WTI Futures |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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