Correlation Between Dongil Metal and Spolytech
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Spolytech 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 Spolytech 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 Spolytech Co, you can compare the effects of market volatilities on Dongil Metal and Spolytech 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 Spolytech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Spolytech.
Diversification Opportunities for Dongil Metal and Spolytech
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongil and Spolytech is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Spolytech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spolytech 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 Spolytech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spolytech has no effect on the direction of Dongil Metal i.e., Dongil Metal and Spolytech go up and down completely randomly.
Pair Corralation between Dongil Metal and Spolytech
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.41 times more return on investment than Spolytech. However, Dongil Metal Co is 2.44 times less risky than Spolytech. It trades about -0.25 of its potential returns per unit of risk. Spolytech Co is currently generating about -0.12 per unit of risk. If you would invest 892,000 in Dongil Metal Co on September 13, 2024 and sell it today you would lose (89,000) from holding Dongil Metal Co or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. Spolytech Co
Performance |
| Timeline |
| Dongil Metal |
| Spolytech |
Dongil Metal and Spolytech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Spolytech
The main advantage of trading using opposite Dongil Metal and Spolytech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Spolytech 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 Spolytech will offset losses from the drop in Spolytech's long position.| Dongil Metal vs. Husteel | Dongil Metal vs. Dongbang Ship Machinery | Dongil Metal vs. Woorim Machinery Co | Dongil Metal vs. Shinsegae Engineering Construction |
| Spolytech vs. Dongil Metal Co | Spolytech vs. SS TECH | Spolytech vs. Seoyon Topmetal Co | Spolytech vs. A Tech Solution 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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