Correlation Between Dongil Metal and MetaLabs
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on Dongil Metal and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and MetaLabs.
Diversification Opportunities for Dongil Metal and MetaLabs
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongil and MetaLabs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Dongil Metal i.e., Dongil Metal and MetaLabs go up and down completely randomly.
Pair Corralation between Dongil Metal and MetaLabs
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.38 times more return on investment than MetaLabs. However, Dongil Metal Co is 2.62 times less risky than MetaLabs. It trades about -0.08 of its potential returns per unit of risk. MetaLabs Co is currently generating about -0.05 per unit of risk. If you would invest 1,234,642 in Dongil Metal Co on August 28, 2024 and sell it today you would lose (394,642) from holding Dongil Metal Co or give up 31.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. MetaLabs Co
Performance |
| Timeline |
| Dongil Metal |
| MetaLabs |
Dongil Metal and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and MetaLabs
The main advantage of trading using opposite Dongil Metal and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel | Dongil Metal vs. Seah Steel Corp |
| MetaLabs vs. Busan Industrial Co | MetaLabs vs. Busan Ind | MetaLabs vs. Mirae Asset Daewoo | MetaLabs vs. UNISEM 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |