Correlation Between Homecast CoLtd and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Dongbang Ship 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 Homecast CoLtd and Dongbang Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Dongbang Ship Machinery, you can compare the effects of market volatilities on Homecast CoLtd and Dongbang Ship 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 Homecast CoLtd with a short position of Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Dongbang Ship.
Diversification Opportunities for Homecast CoLtd and Dongbang Ship
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Homecast and Dongbang is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Dongbang Ship go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Dongbang Ship
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the Dongbang Ship. In addition to that, Homecast CoLtd is 1.04 times more volatile than Dongbang Ship Machinery. It trades about -0.08 of its total potential returns per unit of risk. Dongbang Ship Machinery is currently generating about 0.07 per unit of volatility. If you would invest 259,500 in Dongbang Ship Machinery on September 12, 2024 and sell it today you would earn a total of 22,500 from holding Dongbang Ship Machinery or generate 8.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Homecast CoLtd vs. Dongbang Ship Machinery
Performance |
Timeline |
Homecast CoLtd |
Dongbang Ship Machinery |
Homecast CoLtd and Dongbang Ship Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Homecast CoLtd and Dongbang Ship
The main advantage of trading using opposite Homecast CoLtd and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.Homecast CoLtd vs. Cube Entertainment | Homecast CoLtd vs. Dreamus Company | Homecast CoLtd vs. LG Energy Solution | Homecast CoLtd vs. Dongwon System |
Dongbang Ship vs. Korea New Network | Dongbang Ship vs. Solution Advanced Technology | Dongbang Ship vs. Busan Industrial Co | Dongbang Ship vs. Busan Ind |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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