Correlation Between Innometry and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Innometry and Dongkuk Structures 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 Innometry and Dongkuk Structures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Dongkuk Structures Construction, you can compare the effects of market volatilities on Innometry and Dongkuk Structures 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 Innometry with a short position of Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Dongkuk Structures.
Diversification Opportunities for Innometry and Dongkuk Structures
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innometry and Dongkuk is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures and Innometry 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 Innometry Co are associated (or correlated) with Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Innometry i.e., Innometry and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Innometry and Dongkuk Structures
Assuming the 90 days trading horizon Innometry Co is expected to generate 0.77 times more return on investment than Dongkuk Structures. However, Innometry Co is 1.29 times less risky than Dongkuk Structures. It trades about -0.24 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.2 per unit of risk. If you would invest 912,000 in Innometry Co on September 3, 2024 and sell it today you would lose (110,000) from holding Innometry Co or give up 12.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. Dongkuk Structures Constructio
Performance |
| Timeline |
| Innometry |
| Dongkuk Structures |
Innometry and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Dongkuk Structures
The main advantage of trading using opposite Innometry and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| Dongkuk Structures vs. LG Display | Dongkuk Structures vs. Hyundai Motor | Dongkuk Structures vs. Hyundai Motor Co | Dongkuk Structures vs. Hyundai Motor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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