Correlation Between DONGKUK TED and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and DAEDUCK 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 DAEDUCK 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on DONGKUK TED and DAEDUCK 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and DAEDUCK ELECTRONICS.
Diversification Opportunities for DONGKUK TED and DAEDUCK ELECTRONICS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DONGKUK and DAEDUCK is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between DONGKUK TED and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 1.05 times more return on investment than DAEDUCK ELECTRONICS. However, DONGKUK TED is 1.05 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about 0.02 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about -0.02 per unit of risk. If you would invest 631,000 in DONGKUK TED METAL on October 18, 2024 and sell it today you would earn a total of 13,000 from holding DONGKUK TED METAL or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| DONGKUK TED METAL |
| DAEDUCK ELECTRONICS CoLtd |
DONGKUK TED and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and DAEDUCK ELECTRONICS
The main advantage of trading using opposite DONGKUK TED and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, DAEDUCK 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| DONGKUK TED vs. Korean Reinsurance Co | DONGKUK TED vs. Digital Power Communications | DONGKUK TED vs. Ssangyong Information Communication | DONGKUK TED vs. Jb Financial |
| DAEDUCK ELECTRONICS vs. DONGKUK TED METAL | DAEDUCK ELECTRONICS vs. Daishin Information Communications | DAEDUCK ELECTRONICS vs. Choil Aluminum | DAEDUCK ELECTRONICS vs. NICE Information Service |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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