Correlation Between Digital Imaging and Dong A
Can any of the company-specific risk be diversified away by investing in both Digital Imaging and Dong A 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 Dong A 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 Dong A Steel Technology, you can compare the effects of market volatilities on Digital Imaging and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Imaging and Dong A.
Diversification Opportunities for Digital Imaging and Dong A
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digital and Dong is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Digital Imaging Technology and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Steel has no effect on the direction of Digital Imaging i.e., Digital Imaging and Dong A go up and down completely randomly.
Pair Corralation between Digital Imaging and Dong A
Assuming the 90 days trading horizon Digital Imaging Technology is expected to generate 1.48 times more return on investment than Dong A. However, Digital Imaging is 1.48 times more volatile than Dong A Steel Technology. It trades about 0.11 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about -0.03 per unit of risk. If you would invest 1,340,000 in Digital Imaging Technology on November 8, 2024 and sell it today you would earn a total of 365,000 from holding Digital Imaging Technology or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Imaging Technology vs. Dong A Steel Technology
Performance |
| Timeline |
| Digital Imaging Tech |
| Dong A Steel |
Digital Imaging and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Imaging and Dong A
The main advantage of trading using opposite Digital Imaging and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Imaging position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Digital Imaging vs. LG Household Healthcare | Digital Imaging vs. Coloray International Investment | Digital Imaging vs. Kg Chemical | Digital Imaging vs. Kukdong Oil Chemicals |
| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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