Correlation Between Konan Technology and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Konan Technology and Dongil Technology 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 Konan Technology and Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konan Technology and Dongil Technology, you can compare the effects of market volatilities on Konan Technology and Dongil Technology 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 Konan Technology with a short position of Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konan Technology and Dongil Technology.
Diversification Opportunities for Konan Technology and Dongil Technology
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Konan and Dongil is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology and Konan Technology 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 Konan Technology are associated (or correlated) with Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Konan Technology i.e., Konan Technology and Dongil Technology go up and down completely randomly.
Pair Corralation between Konan Technology and Dongil Technology
Assuming the 90 days trading horizon Konan Technology is expected to generate 2.26 times more return on investment than Dongil Technology. However, Konan Technology is 2.26 times more volatile than Dongil Technology. It trades about 0.06 of its potential returns per unit of risk. Dongil Technology is currently generating about 0.01 per unit of risk. If you would invest 970,000 in Konan Technology on August 30, 2024 and sell it today you would earn a total of 1,620,000 from holding Konan Technology or generate 167.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Konan Technology vs. Dongil Technology
Performance |
| Timeline |
| Konan Technology |
| Dongil Technology |
Konan Technology and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konan Technology and Dongil Technology
The main advantage of trading using opposite Konan Technology and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konan Technology position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| Konan Technology vs. Moonbae Steel | Konan Technology vs. LG Electronics Pfd | Konan Technology vs. Sunny Electronics Corp | Konan Technology vs. Hankook Steel Co |
| Dongil Technology vs. Hannong Chemicals | Dongil Technology vs. Korea Petro Chemical | Dongil Technology vs. Korean Drug Co | Dongil Technology vs. Kukdong Oil Chemicals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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