Correlation Between DONGKUK TED and Dreamus
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and Dreamus 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 Dreamus 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 Dreamus Company, you can compare the effects of market volatilities on DONGKUK TED and Dreamus 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 Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Dreamus.
Diversification Opportunities for DONGKUK TED and Dreamus
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DONGKUK and Dreamus is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company 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 Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and Dreamus go up and down completely randomly.
Pair Corralation between DONGKUK TED and Dreamus
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 0.55 times more return on investment than Dreamus. However, DONGKUK TED METAL is 1.81 times less risky than Dreamus. It trades about -0.04 of its potential returns per unit of risk. Dreamus Company is currently generating about -0.04 per unit of risk. If you would invest 807,000 in DONGKUK TED METAL on September 3, 2024 and sell it today you would lose (212,000) from holding DONGKUK TED METAL or give up 26.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Dreamus Company
Performance |
| Timeline |
| DONGKUK TED METAL |
| Dreamus Company |
DONGKUK TED and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Dreamus
The main advantage of trading using opposite DONGKUK TED and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. LG Energy Solution | DONGKUK TED vs. SK Hynix |
| Dreamus vs. Seoul Electronics Telecom | Dreamus vs. Lotte Chilsung Beverage | Dreamus vs. Lion Chemtech Co | Dreamus vs. PH Tech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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