Correlation Between Dongil Metal and Insung Information
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Insung 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 Insung 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 Insung Information Co, you can compare the effects of market volatilities on Dongil Metal and Insung 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Insung Information.
Diversification Opportunities for Dongil Metal and Insung Information
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongil and Insung is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Dongil Metal i.e., Dongil Metal and Insung Information go up and down completely randomly.
Pair Corralation between Dongil Metal and Insung Information
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Metal Co is 2.72 times less risky than Insung Information. The stock trades about -0.12 of its potential returns per unit of risk. The Insung Information Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 185,500 in Insung Information Co on September 13, 2024 and sell it today you would earn a total of 3,900 from holding Insung Information Co or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Insung Information Co
Performance |
| Timeline |
| Dongil Metal |
| Insung Information |
Dongil Metal and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Insung Information
The main advantage of trading using opposite Dongil Metal and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Insung 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 Insung Information will offset losses from the drop in Insung Information's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
| Insung Information vs. Phoenix Materials Co | Insung Information vs. WONIK Materials CoLtd | Insung Information vs. Shinhan Inverse Copper | Insung Information vs. MetaLabs Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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