Correlation Between Dgb Financial and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Dgb Financial and Dongsin Engineering 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 Dgb Financial and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dgb Financial and Dongsin Engineering Construction, you can compare the effects of market volatilities on Dgb Financial and Dongsin Engineering 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 Dgb Financial with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dgb Financial and Dongsin Engineering.
Diversification Opportunities for Dgb Financial and Dongsin Engineering
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dgb and Dongsin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dgb Financial and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Dgb Financial 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 Dgb Financial are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Dgb Financial i.e., Dgb Financial and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Dgb Financial and Dongsin Engineering
Assuming the 90 days trading horizon Dgb Financial is expected to generate 33.89 times less return on investment than Dongsin Engineering. But when comparing it to its historical volatility, Dgb Financial is 7.05 times less risky than Dongsin Engineering. It trades about 0.04 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,931,000 in Dongsin Engineering Construction on September 26, 2024 and sell it today you would earn a total of 2,534,000 from holding Dongsin Engineering Construction or generate 131.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Dgb Financial vs. Dongsin Engineering Constructi
Performance |
Timeline |
Dgb Financial |
Dongsin Engineering |
Dgb Financial and Dongsin Engineering Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dgb Financial and Dongsin Engineering
The main advantage of trading using opposite Dgb Financial and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dgb Financial position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.Dgb Financial vs. PJ Metal Co | Dgb Financial vs. Daiyang Metal Co | Dgb Financial vs. Dongbang Transport Logistics | Dgb Financial vs. Hyunwoo Industrial Co |
Dongsin Engineering vs. Dgb Financial | Dongsin Engineering vs. Jeju Bank | Dongsin Engineering vs. Hannong Chemicals | Dongsin Engineering vs. Sung Bo Chemicals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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