Correlation Between Air Busan and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Air Busan and Dongsin Engineering 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 Air Busan and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Busan Co and Dongsin Engineering Construction, you can compare the effects of market volatilities on Air Busan and Dongsin Engineering 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 Air Busan with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Dongsin Engineering.
Diversification Opportunities for Air Busan and Dongsin Engineering
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Dongsin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Air Busan 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 Air Busan Co are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Air Busan i.e., Air Busan and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Air Busan and Dongsin Engineering
Assuming the 90 days trading horizon Air Busan Co is expected to under-perform the Dongsin Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Air Busan Co is 2.54 times less risky than Dongsin Engineering. The stock trades about -0.03 of its potential returns per unit of risk. The Dongsin Engineering Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,677,218 in Dongsin Engineering Construction on August 27, 2024 and sell it today you would lose (104,218) from holding Dongsin Engineering Construction or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| Air Busan |
| Dongsin Engineering |
Air Busan and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Dongsin Engineering
The main advantage of trading using opposite Air Busan and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| Air Busan vs. Busan Industrial Co | Air Busan vs. Busan Ind | Air Busan vs. Mirae Asset Daewoo | Air Busan vs. UNISEM Co |
| Dongsin Engineering vs. Busan Industrial Co | Dongsin Engineering vs. Busan Ind | Dongsin Engineering vs. Mirae Asset Daewoo | Dongsin Engineering vs. UNISEM 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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