Correlation Between Incar Financial and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Incar Financial 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 Incar Financial and Dongwon Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and Dongwon Metal Co, you can compare the effects of market volatilities on Incar Financial 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 Incar Financial with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and Dongwon Metal.
Diversification Opportunities for Incar Financial and Dongwon Metal
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Incar and Dongwon is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal and Incar Financial 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 Incar Financial Service 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 Incar Financial i.e., Incar Financial and Dongwon Metal go up and down completely randomly.
Pair Corralation between Incar Financial and Dongwon Metal
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 2.56 times more return on investment than Dongwon Metal. However, Incar Financial is 2.56 times more volatile than Dongwon Metal Co. It trades about 0.0 of its potential returns per unit of risk. Dongwon Metal Co is currently generating about -0.04 per unit of risk. If you would invest 1,477,352 in Incar Financial Service on August 25, 2024 and sell it today you would lose (865,352) from holding Incar Financial Service or give up 58.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.85% |
| Values | Daily Returns |
Incar Financial Service vs. Dongwon Metal Co
Performance |
| Timeline |
| Incar Financial Service |
| Dongwon Metal |
Incar Financial and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and Dongwon Metal
The main advantage of trading using opposite Incar Financial and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial 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.| Incar Financial vs. Hanjinkal | Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Mirae Asset Daewoo |
| Dongwon Metal vs. NewFlex Technology Co | Dongwon Metal vs. Daou Technology | Dongwon Metal vs. KB Financial Group | Dongwon Metal vs. Konan 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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