Correlation Between DONGKUK COATED and SH Energy
Can any of the company-specific risk be diversified away by investing in both DONGKUK COATED and SH Energy 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 DONGKUK COATED and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and SH Energy Chemical, you can compare the effects of market volatilities on DONGKUK COATED and SH Energy 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 DONGKUK COATED with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK COATED and SH Energy.
Diversification Opportunities for DONGKUK COATED and SH Energy
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between DONGKUK and 002360 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and DONGKUK COATED 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 DONGKUK TED METAL are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of DONGKUK COATED i.e., DONGKUK COATED and SH Energy go up and down completely randomly.
Pair Corralation between DONGKUK COATED and SH Energy
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 0.52 times more return on investment than SH Energy. However, DONGKUK TED METAL is 1.93 times less risky than SH Energy. It trades about -0.04 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.06 per unit of risk. If you would invest 621,000 in DONGKUK TED METAL on September 13, 2024 and sell it today you would lose (17,000) from holding DONGKUK TED METAL or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. SH Energy Chemical
Performance |
| Timeline |
| DONGKUK TED METAL |
| SH Energy Chemical |
DONGKUK COATED and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK COATED and SH Energy
The main advantage of trading using opposite DONGKUK COATED and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK COATED position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| DONGKUK COATED vs. Samsung Electronics Co | DONGKUK COATED vs. Samsung Electronics Co | DONGKUK COATED vs. LG Energy Solution | DONGKUK COATED vs. SK Hynix |
| SH Energy vs. Dongwon Metal Co | SH Energy vs. Daiyang Metal Co | SH Energy vs. Kukdong Oil Chemicals | SH Energy vs. DONGKUK TED METAL |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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