Correlation Between ABOV Semiconductor and Dong A
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on ABOV Semiconductor and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Dong A.
Diversification Opportunities for ABOV Semiconductor and Dong A
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABOV and Dong is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and Dong A go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Dong A
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 2.1 times more return on investment than Dong A. However, ABOV Semiconductor is 2.1 times more volatile than Dong A Steel Technology. It trades about 0.27 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about 0.39 per unit of risk. If you would invest 753,000 in ABOV Semiconductor Co on October 28, 2024 and sell it today you would earn a total of 138,000 from holding ABOV Semiconductor Co or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Dong A Steel Technology
Performance |
| Timeline |
| ABOV Semiconductor |
| Dong A Steel |
ABOV Semiconductor and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Dong A
The main advantage of trading using opposite ABOV Semiconductor and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| ABOV Semiconductor vs. Haitai Confectionery Foods | ABOV Semiconductor vs. BGF Retail Co | ABOV Semiconductor vs. SK Telecom Co | ABOV Semiconductor vs. KT Submarine Telecom |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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