Correlation Between Alton Sports and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Dongbang Transport 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 Alton Sports and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Dongbang Transport Logistics, you can compare the effects of market volatilities on Alton Sports and Dongbang Transport 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 Alton Sports with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Dongbang Transport.
Diversification Opportunities for Alton Sports and Dongbang Transport
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Dongbang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Alton Sports i.e., Alton Sports and Dongbang Transport go up and down completely randomly.
Pair Corralation between Alton Sports and Dongbang Transport
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 0.72 times more return on investment than Dongbang Transport. However, Alton Sports CoLtd is 1.38 times less risky than Dongbang Transport. It trades about 0.35 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about -0.05 per unit of risk. If you would invest 144,000 in Alton Sports CoLtd on November 3, 2024 and sell it today you would earn a total of 10,000 from holding Alton Sports CoLtd or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Alton Sports CoLtd |
| Dongbang Transport |
Alton Sports and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Dongbang Transport
The main advantage of trading using opposite Alton Sports and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Alton Sports vs. Samyung Trading Co | Alton Sports vs. Coloray International Investment | Alton Sports vs. Sangsangin Investment Securities | Alton Sports vs. TS Investment Corp |
| Dongbang Transport vs. YG Entertainment | Dongbang Transport vs. DC Media Co | Dongbang Transport vs. INFINITT Healthcare Co | Dongbang Transport vs. Next Entertainment World |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |