Correlation Between Dongil Metal and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Heungkuk Metaltech 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 Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Dongil Metal and Heungkuk Metaltech 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 Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Heungkuk Metaltech.
Diversification Opportunities for Dongil Metal and Heungkuk Metaltech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongil and Heungkuk is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Dongil Metal i.e., Dongil Metal and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Dongil Metal and Heungkuk Metaltech
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 1.62 times more return on investment than Heungkuk Metaltech. However, Dongil Metal is 1.62 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.0 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.14 per unit of risk. If you would invest 809,000 in Dongil Metal Co on November 9, 2024 and sell it today you would lose (5,000) from holding Dongil Metal Co or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Dongil Metal |
| Heungkuk Metaltech CoLtd |
Dongil Metal and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Heungkuk Metaltech
The main advantage of trading using opposite Dongil Metal and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Dongil Metal vs. Soulbrain Holdings Co | Dongil Metal vs. Wonik Ips Co | Dongil Metal vs. TES Co | Dongil Metal vs. Dongjin Semichem Co |
| Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Hyundai Motor Co | Heungkuk Metaltech vs. Hyundai Motor |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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