Correlation Between DONGKUK TED and Anam Electronics
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and Anam Electronics 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 TED and Anam Electronics 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 Anam Electronics Co, you can compare the effects of market volatilities on DONGKUK TED and Anam Electronics 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 TED with a short position of Anam Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Anam Electronics.
Diversification Opportunities for DONGKUK TED and Anam Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DONGKUK and Anam is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Anam Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anam Electronics and DONGKUK TED 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 Anam Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anam Electronics has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and Anam Electronics go up and down completely randomly.
Pair Corralation between DONGKUK TED and Anam Electronics
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 0.57 times more return on investment than Anam Electronics. However, DONGKUK TED METAL is 1.77 times less risky than Anam Electronics. It trades about 0.25 of its potential returns per unit of risk. Anam Electronics Co is currently generating about 0.12 per unit of risk. If you would invest 610,000 in DONGKUK TED METAL on October 14, 2024 and sell it today you would earn a total of 36,000 from holding DONGKUK TED METAL or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Anam Electronics Co
Performance |
| Timeline |
| DONGKUK TED METAL |
| Anam Electronics |
DONGKUK TED and Anam Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Anam Electronics
The main advantage of trading using opposite DONGKUK TED and Anam Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, Anam Electronics 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 Anam Electronics will offset losses from the drop in Anam Electronics' long position.| DONGKUK TED vs. Dongil Metal Co | DONGKUK TED vs. Clean Science co | DONGKUK TED vs. Hanjoo Light Metal | DONGKUK TED vs. Daiyang Metal Co |
| Anam Electronics vs. Innowireless Co | Anam Electronics vs. DONGKUK TED METAL | Anam Electronics vs. Mobile Appliance | Anam Electronics vs. Dongil Metal 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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