Correlation Between Dongil Metal and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Hankook Furniture 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 Dongil Metal and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and Hankook Furniture Co, you can compare the effects of market volatilities on Dongil Metal and Hankook Furniture 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 Dongil Metal with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Hankook Furniture.
Diversification Opportunities for Dongil Metal and Hankook Furniture
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongil and Hankook is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Dongil Metal 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 Dongil Metal Co are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Dongil Metal i.e., Dongil Metal and Hankook Furniture go up and down completely randomly.
Pair Corralation between Dongil Metal and Hankook Furniture
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 3.59 times more return on investment than Hankook Furniture. However, Dongil Metal is 3.59 times more volatile than Hankook Furniture Co. It trades about 0.2 of its potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.1 per unit of risk. If you would invest 810,000 in Dongil Metal Co on October 30, 2024 and sell it today you would earn a total of 69,000 from holding Dongil Metal Co or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Hankook Furniture Co
Performance |
| Timeline |
| Dongil Metal |
| Hankook Furniture |
Dongil Metal and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Hankook Furniture
The main advantage of trading using opposite Dongil Metal and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Dongil Metal vs. Jinro Distillers Co | Dongil Metal vs. Heungkuk Metaltech CoLtd | Dongil Metal vs. Kbi Metal Co | Dongil Metal vs. Innowireless Co |
| Hankook Furniture vs. Samsung Electronics Co | Hankook Furniture vs. Samsung Electronics Co | Hankook Furniture vs. KB Financial Group | Hankook Furniture vs. Shinhan Financial Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |