Correlation Between Dongil Metal and UTI
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and UTI 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 UTI 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 UTI Inc, you can compare the effects of market volatilities on Dongil Metal and UTI 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 UTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and UTI.
Diversification Opportunities for Dongil Metal and UTI
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongil and UTI is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and UTI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTI 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 UTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTI Inc has no effect on the direction of Dongil Metal i.e., Dongil Metal and UTI go up and down completely randomly.
Pair Corralation between Dongil Metal and UTI
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the UTI. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Metal Co is 2.58 times less risky than UTI. The stock trades about -0.13 of its potential returns per unit of risk. The UTI Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,165,000 in UTI Inc on September 15, 2024 and sell it today you would lose (5,000) from holding UTI Inc or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. UTI Inc
Performance |
| Timeline |
| Dongil Metal |
| UTI Inc |
Dongil Metal and UTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and UTI
The main advantage of trading using opposite Dongil Metal and UTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, UTI 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 UTI will offset losses from the drop in UTI's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
| UTI vs. Nice Information Telecommunication | UTI vs. Daejung Chemicals Metals | UTI vs. Dongil Metal Co | UTI vs. Ssangyong Information Communication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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