Correlation Between Organic Special and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Organic Special and Dongwoo Farm 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 Organic Special and Dongwoo Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Organic Special Pet and Dongwoo Farm To, you can compare the effects of market volatilities on Organic Special and Dongwoo Farm 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 Organic Special with a short position of Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Special and Dongwoo Farm.
Diversification Opportunities for Organic Special and Dongwoo Farm
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Organic and Dongwoo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Organic Special Pet and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To and Organic Special 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 Organic Special Pet are associated (or correlated) with Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Organic Special i.e., Organic Special and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Organic Special and Dongwoo Farm
Assuming the 90 days trading horizon Organic Special Pet is expected to generate 0.68 times more return on investment than Dongwoo Farm. However, Organic Special Pet is 1.46 times less risky than Dongwoo Farm. It trades about -0.05 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.06 per unit of risk. If you would invest 269,000 in Organic Special Pet on November 8, 2024 and sell it today you would lose (2,000) from holding Organic Special Pet or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Organic Special Pet vs. Dongwoo Farm To
Performance |
| Timeline |
| Organic Special Pet |
| Dongwoo Farm To |
Organic Special and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Organic Special and Dongwoo Farm
The main advantage of trading using opposite Organic Special and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Special position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Organic Special vs. Sejong Telecom | Organic Special vs. Seoul Electronics Telecom | Organic Special vs. Genie Music | Organic Special vs. ECSTELECOM Co |
| Dongwoo Farm vs. Golden Bridge Investment | Dongwoo Farm vs. EBEST Investment Securities | Dongwoo Farm vs. Woori Technology Investment | Dongwoo Farm vs. DB Financial Investment |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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