Correlation Between DONGKUK TED and BBC
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and BBC 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 BBC 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 BBC Co, you can compare the effects of market volatilities on DONGKUK TED and BBC 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 BBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and BBC.
Diversification Opportunities for DONGKUK TED and BBC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DONGKUK and BBC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and BBC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBC Co 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 BBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBC Co has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and BBC go up and down completely randomly.
Pair Corralation between DONGKUK TED and BBC
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to under-perform the BBC. In addition to that, DONGKUK TED is 1.3 times more volatile than BBC Co. It trades about -0.1 of its total potential returns per unit of risk. BBC Co is currently generating about 0.0 per unit of volatility. If you would invest 924,023 in BBC Co on August 29, 2024 and sell it today you would lose (107,023) from holding BBC Co or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.5% |
| Values | Daily Returns |
DONGKUK TED METAL vs. BBC Co
Performance |
| Timeline |
| DONGKUK TED METAL |
| BBC Co |
DONGKUK TED and BBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and BBC
The main advantage of trading using opposite DONGKUK TED and BBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, BBC 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 BBC will offset losses from the drop in BBC's 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 |
| BBC vs. Air Busan Co | BBC vs. Cloud Air CoLtd | BBC vs. iNtRON Biotechnology | BBC vs. Lindeman Asia 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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