Correlation Between Ford and Dongwoon Anatech
Can any of the company-specific risk be diversified away by investing in both Ford and Dongwoon Anatech 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 Ford and Dongwoon Anatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Dongwoon Anatech Co, you can compare the effects of market volatilities on Ford and Dongwoon Anatech 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 Ford with a short position of Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Dongwoon Anatech.
Diversification Opportunities for Ford and Dongwoon Anatech
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Dongwoon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech and Ford 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 Ford Motor are associated (or correlated) with Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Ford i.e., Ford and Dongwoon Anatech go up and down completely randomly.
Pair Corralation between Ford and Dongwoon Anatech
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Dongwoon Anatech. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.2 times less risky than Dongwoon Anatech. The stock trades about -0.18 of its potential returns per unit of risk. The Dongwoon Anatech Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,665,913 in Dongwoon Anatech Co on October 16, 2024 and sell it today you would earn a total of 201,087 from holding Dongwoon Anatech Co or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Ford Motor vs. Dongwoon Anatech Co
Performance |
| Timeline |
| Ford Motor |
| Dongwoon Anatech |
Ford and Dongwoon Anatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Dongwoon Anatech
The main advantage of trading using opposite Ford and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.The idea behind Ford Motor and Dongwoon Anatech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dongwoon Anatech vs. SK Hynix | Dongwoon Anatech vs. LX Semicon Co | Dongwoon Anatech vs. Tokai Carbon Korea | Dongwoon Anatech vs. People Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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