Correlation Between Nable Communications and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Dongwon System 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 Nable Communications and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Dongwon System, you can compare the effects of market volatilities on Nable Communications and Dongwon System 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 Nable Communications with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Dongwon System.
Diversification Opportunities for Nable Communications and Dongwon System
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nable and Dongwon is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and Nable Communications 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 Nable Communications are associated (or correlated) with Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Nable Communications i.e., Nable Communications and Dongwon System go up and down completely randomly.
Pair Corralation between Nable Communications and Dongwon System
Assuming the 90 days trading horizon Nable Communications is expected to under-perform the Dongwon System. But the stock apears to be less risky and, when comparing its historical volatility, Nable Communications is 2.6 times less risky than Dongwon System. The stock trades about -0.02 of its potential returns per unit of risk. The Dongwon System is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,403,378 in Dongwon System on September 20, 2024 and sell it today you would earn a total of 851,622 from holding Dongwon System or generate 25.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Dongwon System
Performance |
| Timeline |
| Nable Communications |
| Dongwon System |
Nable Communications and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Dongwon System
The main advantage of trading using opposite Nable Communications and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Dongwon System 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 System will offset losses from the drop in Dongwon System's long position.| Nable Communications vs. TK Chemical | Nable Communications vs. KPX Green Chemical | Nable Communications vs. Sam Yang Foods | Nable Communications vs. SH Energy Chemical |
| Dongwon System vs. Nable Communications | Dongwon System vs. Shinsegae Information Communication | Dongwon System vs. Ssangyong Information Communication | Dongwon System vs. Koryo Credit Information |
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.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |