Correlation Between Dongil Metal and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and Sangsin Energy 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 Sangsin Energy 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 Sangsin Energy Display, you can compare the effects of market volatilities on Dongil Metal and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Sangsin Energy.
Diversification Opportunities for Dongil Metal and Sangsin Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongil and Sangsin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Dongil Metal i.e., Dongil Metal and Sangsin Energy go up and down completely randomly.
Pair Corralation between Dongil Metal and Sangsin Energy
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the Sangsin Energy. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Metal Co is 1.07 times less risky than Sangsin Energy. The stock trades about -0.06 of its potential returns per unit of risk. The Sangsin Energy Display is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,660,033 in Sangsin Energy Display on September 2, 2024 and sell it today you would lose (903,033) from holding Sangsin Energy Display or give up 54.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.52% |
| Values | Daily Returns |
Dongil Metal Co vs. Sangsin Energy Display
Performance |
| Timeline |
| Dongil Metal |
| Sangsin Energy Display |
Dongil Metal and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Sangsin Energy
The main advantage of trading using opposite Dongil Metal and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Hyundai Steel |
| Sangsin Energy vs. Korea New Network | Sangsin Energy vs. ICD Co | Sangsin Energy vs. DYPNF CoLtd | Sangsin Energy vs. Busan Industrial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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