Correlation Between Dongil Metal and Korea Information
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Dongil Metal and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Korea Information.
Diversification Opportunities for Dongil Metal and Korea Information
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongil and Korea is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Dongil Metal i.e., Dongil Metal and Korea Information go up and down completely randomly.
Pair Corralation between Dongil Metal and Korea Information
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the Korea Information. In addition to that, Dongil Metal is 1.11 times more volatile than Korea Information Communications. It trades about -0.06 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.02 per unit of volatility. If you would invest 1,145,000 in Korea Information Communications on September 24, 2024 and sell it today you would lose (363,000) from holding Korea Information Communications or give up 31.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.52% |
| Values | Daily Returns |
Dongil Metal Co vs. Korea Information Communicatio
Performance |
| Timeline |
| Dongil Metal |
| Korea Information |
Dongil Metal and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Korea Information
The main advantage of trading using opposite Dongil Metal and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Dongil Metal vs. INSUN Environmental New | Dongil Metal vs. Finebesteel | Dongil Metal vs. Bookook Steel | Dongil Metal vs. J Steel Co |
| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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