Correlation Between DeviceENGCOLtd and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both DeviceENGCOLtd and Dongil Technology 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 DeviceENGCOLtd and Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeviceENGCOLtd and Dongil Technology, you can compare the effects of market volatilities on DeviceENGCOLtd and Dongil Technology 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 DeviceENGCOLtd with a short position of Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeviceENGCOLtd and Dongil Technology.
Diversification Opportunities for DeviceENGCOLtd and Dongil Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DeviceENGCOLtd and Dongil is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DeviceENGCOLtd and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology and DeviceENGCOLtd 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 DeviceENGCOLtd are associated (or correlated) with Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of DeviceENGCOLtd i.e., DeviceENGCOLtd and Dongil Technology go up and down completely randomly.
Pair Corralation between DeviceENGCOLtd and Dongil Technology
Assuming the 90 days trading horizon DeviceENGCOLtd is expected to generate 2.19 times more return on investment than Dongil Technology. However, DeviceENGCOLtd is 2.19 times more volatile than Dongil Technology. It trades about -0.02 of its potential returns per unit of risk. Dongil Technology is currently generating about -0.35 per unit of risk. If you would invest 1,193,000 in DeviceENGCOLtd on November 4, 2024 and sell it today you would lose (11,000) from holding DeviceENGCOLtd or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeviceENGCOLtd vs. Dongil Technology
Performance |
| Timeline |
| DeviceENGCOLtd |
| Dongil Technology |
DeviceENGCOLtd and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeviceENGCOLtd and Dongil Technology
The main advantage of trading using opposite DeviceENGCOLtd and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeviceENGCOLtd position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| DeviceENGCOLtd vs. KEPCO Engineering Construction | DeviceENGCOLtd vs. Seers Technology | DeviceENGCOLtd vs. AeroSpace Technology of | DeviceENGCOLtd vs. Camus Engineering Construction |
| Dongil Technology vs. Neungyule Education | Dongil Technology vs. Wonil Special Steel | Dongil Technology vs. Samsung Life Insurance | Dongil Technology vs. Nature and Environment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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