Correlation Between Digital Imaging and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Digital Imaging and Dongwon Metal 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 Digital Imaging and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Imaging Technology and Dongwon Metal Co, you can compare the effects of market volatilities on Digital Imaging and Dongwon Metal 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 Digital Imaging with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Imaging and Dongwon Metal.
Diversification Opportunities for Digital Imaging and Dongwon Metal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Digital and Dongwon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Digital Imaging Technology and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Digital Imaging 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 Digital Imaging Technology are associated (or correlated) with Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Digital Imaging i.e., Digital Imaging and Dongwon Metal go up and down completely randomly.
Pair Corralation between Digital Imaging and Dongwon Metal
Assuming the 90 days trading horizon Digital Imaging Technology is expected to generate 1.44 times more return on investment than Dongwon Metal. However, Digital Imaging is 1.44 times more volatile than Dongwon Metal Co. It trades about 0.05 of its potential returns per unit of risk. Dongwon Metal Co is currently generating about 0.02 per unit of risk. If you would invest 548,646 in Digital Imaging Technology on September 5, 2024 and sell it today you would earn a total of 565,354 from holding Digital Imaging Technology or generate 103.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Imaging Technology vs. Dongwon Metal Co
Performance |
| Timeline |
| Digital Imaging Tech |
| Dongwon Metal |
Digital Imaging and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Imaging and Dongwon Metal
The main advantage of trading using opposite Digital Imaging and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Imaging position performs unexpectedly, Dongwon Metal 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 Dongwon Metal will offset losses from the drop in Dongwon Metal's long position.| Digital Imaging vs. SK Hynix | Digital Imaging vs. LX Semicon Co | Digital Imaging vs. Tokai Carbon Korea | Digital Imaging vs. People Technology |
| Dongwon Metal vs. Hwangkum Steel Technology | Dongwon Metal vs. Puloon Technology | Dongwon Metal vs. Heungkuk Metaltech CoLtd | Dongwon Metal vs. Digital Imaging Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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