Correlation Between Echomarketing CoLtd and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd 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 Echomarketing CoLtd and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Dongbang Transport Logistics, you can compare the effects of market volatilities on Echomarketing CoLtd 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 Echomarketing CoLtd with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Dongbang Transport.
Diversification Opportunities for Echomarketing CoLtd and Dongbang Transport
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Echomarketing and Dongbang is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing 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 Echomarketing CoLtd 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 Echomarketing 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 Echomarketing CoLtd i.e., Echomarketing CoLtd and Dongbang Transport go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Dongbang Transport
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to under-perform the Dongbang Transport. In addition to that, Echomarketing CoLtd is 1.14 times more volatile than Dongbang Transport Logistics. It trades about -0.19 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.09 per unit of volatility. If you would invest 223,000 in Dongbang Transport Logistics on October 16, 2024 and sell it today you would earn a total of 4,500 from holding Dongbang Transport Logistics or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echomarketing CoLtd vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Echomarketing CoLtd |
| Dongbang Transport |
Echomarketing CoLtd and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echomarketing CoLtd and Dongbang Transport
The main advantage of trading using opposite Echomarketing CoLtd and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd 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.| Echomarketing CoLtd vs. AfreecaTV Co | Echomarketing CoLtd vs. Seegene | Echomarketing CoLtd vs. SS TECH | Echomarketing CoLtd vs. Ezwelfare Co |
| Dongbang Transport vs. Dongil Metal Co | Dongbang Transport vs. TJ media Co | Dongbang Transport vs. Next Entertainment World | Dongbang Transport vs. Echomarketing CoLtd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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