Correlation Between Dongwha Enterprise and Ananti

Can any of the company-specific risk be diversified away by investing in both Dongwha Enterprise and Ananti 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 Dongwha Enterprise and Ananti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dongwha Enterprise CoLtd and Ananti Inc, you can compare the effects of market volatilities on Dongwha Enterprise and Ananti 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 Dongwha Enterprise with a short position of Ananti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwha Enterprise and Ananti.

Diversification Opportunities for Dongwha Enterprise and Ananti

-0.33

Correlation Coefficient

Dongwha Enterprise  Ananti

Very good diversification

The 3 months correlation between Dongwha and Ananti is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dongwha Enterprise CoLtd and Ananti Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ananti Inc and Dongwha Enterprise 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 Dongwha Enterprise CoLtd are associated (or correlated) with Ananti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ananti Inc has no effect on the direction of Dongwha Enterprise i.e., Dongwha Enterprise and Ananti go up and down completely randomly.

Pair Corralation between Dongwha Enterprise and Ananti

Assuming the 90 days trading horizon Dongwha Enterprise CoLtd is expected to under-perform the Ananti. In addition to that, Dongwha Enterprise is 1.18 times more volatile than Ananti Inc. It trades about -0.08 of its total potential returns per unit of risk. Ananti Inc is currently generating about 0.05 per unit of volatility. If you would invest  512,000  in Ananti Inc on August 31, 2024 and sell it today you would earn a total of  32,000  from holding Ananti Inc or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Dongwha Enterprise CoLtd  vs.  Ananti Inc

Dongwha Enterprise CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dongwha Enterprise CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Ananti Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ananti Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ananti may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Dongwha Enterprise and Ananti

The main advantage of trading using opposite Dongwha Enterprise and Ananti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwha Enterprise position performs unexpectedly, Ananti 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 Ananti will offset losses from the drop in Ananti's long position.

The idea behind Dongwha Enterprise CoLtd and Ananti Inc 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.