Correlation Between Dongil Metal and EMnet
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and EMnet 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 EMnet 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 eMnet Inc, you can compare the effects of market volatilities on Dongil Metal and EMnet 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 EMnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and EMnet.
Diversification Opportunities for Dongil Metal and EMnet
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongil and EMnet is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and eMnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMnet Inc 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 EMnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMnet Inc has no effect on the direction of Dongil Metal i.e., Dongil Metal and EMnet go up and down completely randomly.
Pair Corralation between Dongil Metal and EMnet
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the EMnet. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Metal Co is 1.45 times less risky than EMnet. The stock trades about -0.06 of its potential returns per unit of risk. The eMnet Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 415,248 in eMnet Inc on October 25, 2024 and sell it today you would lose (168,748) from holding eMnet Inc or give up 40.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.31% |
| Values | Daily Returns |
Dongil Metal Co vs. eMnet Inc
Performance |
| Timeline |
| Dongil Metal |
| eMnet Inc |
Dongil Metal and EMnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and EMnet
The main advantage of trading using opposite Dongil Metal and EMnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, EMnet 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 EMnet will offset losses from the drop in EMnet's long position.| Dongil Metal vs. Samlip General Foods | Dongil Metal vs. Samyang Foods Co | Dongil Metal vs. Sempio Foods Co | Dongil Metal vs. CJ Seafood Corp |
| EMnet vs. Kisan Telecom Co | EMnet vs. Wireless Power Amplifier | EMnet vs. Nice Information Telecommunication | EMnet vs. ECSTELECOM 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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