Correlation Between Dongil Metal and GS Retail
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and GS Retail 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 GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Dongil Metal and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and GS Retail.
Diversification Opportunities for Dongil Metal and GS Retail
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongil and 007070 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Dongil Metal i.e., Dongil Metal and GS Retail go up and down completely randomly.
Pair Corralation between Dongil Metal and GS Retail
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the GS Retail. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Metal Co is 2.88 times less risky than GS Retail. The stock trades about -0.2 of its potential returns per unit of risk. The GS Retail Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,075,000 in GS Retail Co on August 28, 2024 and sell it today you would earn a total of 235,000 from holding GS Retail Co or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. GS Retail Co
Performance |
| Timeline |
| Dongil Metal |
| GS Retail |
Dongil Metal and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and GS Retail
The main advantage of trading using opposite Dongil Metal and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel | Dongil Metal vs. Seah Steel Corp |
| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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