Correlation Between DataSolution and Dong A
Can any of the company-specific risk be diversified away by investing in both DataSolution and Dong A 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 DataSolution and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DataSolution and Dong A Eltek, you can compare the effects of market volatilities on DataSolution and Dong A 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 DataSolution with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of DataSolution and Dong A.
Diversification Opportunities for DataSolution and Dong A
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DataSolution and Dong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding DataSolution and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek and DataSolution 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 DataSolution are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of DataSolution i.e., DataSolution and Dong A go up and down completely randomly.
Pair Corralation between DataSolution and Dong A
Assuming the 90 days trading horizon DataSolution is expected to generate 1.44 times more return on investment than Dong A. However, DataSolution is 1.44 times more volatile than Dong A Eltek. It trades about 0.2 of its potential returns per unit of risk. Dong A Eltek is currently generating about -0.15 per unit of risk. If you would invest 433,500 in DataSolution on August 30, 2024 and sell it today you would earn a total of 63,000 from holding DataSolution or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DataSolution vs. Dong A Eltek
Performance |
| Timeline |
| DataSolution |
| Dong A Eltek |
DataSolution and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DataSolution and Dong A
The main advantage of trading using opposite DataSolution and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DataSolution position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| DataSolution vs. Samsung Electronics Co | DataSolution vs. Samsung Electronics Co | DataSolution vs. LG Energy Solution | DataSolution vs. SK Hynix |
| Dong A vs. DataSolution | Dong A vs. Lotte Data Communication | Dong A vs. Hankuk Steel Wire | Dong A vs. Shinsegae Information Communication |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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