Correlation Between Dongil Metal and CU Tech
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and CU Tech 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 CU Tech 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 CU Tech Corp, you can compare the effects of market volatilities on Dongil Metal and CU Tech 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 CU Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and CU Tech.
Diversification Opportunities for Dongil Metal and CU Tech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongil and 376290 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and CU Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Tech Corp 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 CU Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Tech Corp has no effect on the direction of Dongil Metal i.e., Dongil Metal and CU Tech go up and down completely randomly.
Pair Corralation between Dongil Metal and CU Tech
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.78 times more return on investment than CU Tech. However, Dongil Metal Co is 1.28 times less risky than CU Tech. It trades about -0.24 of its potential returns per unit of risk. CU Tech Corp is currently generating about -0.21 per unit of risk. If you would invest 860,000 in Dongil Metal Co on September 12, 2024 and sell it today you would lose (57,000) from holding Dongil Metal Co or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dongil Metal Co vs. CU Tech Corp
Performance |
| Timeline |
| Dongil Metal |
| CU Tech Corp |
Dongil Metal and CU Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and CU Tech
The main advantage of trading using opposite Dongil Metal and CU Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, CU Tech 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 CU Tech will offset losses from the drop in CU Tech's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
| CU Tech vs. Dongil Metal Co | CU Tech vs. Hanjoo Light Metal | CU Tech vs. Youngsin Metal Industrial | CU Tech vs. Kbi Metal 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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