Correlation Between BGF Retail and Dongwon System
Can any of the company-specific risk be diversified away by investing in both BGF Retail 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 BGF Retail and Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Dongwon System, you can compare the effects of market volatilities on BGF Retail 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 BGF Retail with a short position of Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Dongwon System.
Diversification Opportunities for BGF Retail and Dongwon System
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BGF and Dongwon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System and BGF Retail 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 BGF Retail Co 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 BGF Retail i.e., BGF Retail and Dongwon System go up and down completely randomly.
Pair Corralation between BGF Retail and Dongwon System
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Dongwon System. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.67 times less risky than Dongwon System. The stock trades about -0.07 of its potential returns per unit of risk. The Dongwon System is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,138,930 in Dongwon System on September 13, 2024 and sell it today you would earn a total of 111,070 from holding Dongwon System or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Dongwon System
Performance |
| Timeline |
| BGF Retail |
| Dongwon System |
BGF Retail and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Dongwon System
The main advantage of trading using opposite BGF Retail and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail 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.| BGF Retail vs. Korea New Network | BGF Retail vs. ICD Co | BGF Retail vs. DYPNF CoLtd | BGF Retail vs. Solution Advanced Technology |
| Dongwon System vs. ABOV Semiconductor Co | Dongwon System vs. BGF Retail Co | Dongwon System vs. Seoul Semiconductor Co | Dongwon System vs. ITM Semiconductor Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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