Correlation Between Dongil Technology and ENF Technology

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

By analyzing existing cross correlation between Dongil Technology and ENF Technology Co, you can compare the effects of market volatilities on Dongil Technology and ENF Technology 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 Dongil Technology with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Technology and ENF Technology.

Diversification Opportunities for Dongil Technology and ENF Technology

0.14

Correlation Coefficient

Dongil Technology  ENF Technology

Average diversification

The 3 months correlation between Dongil and ENF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Technology and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and Dongil Technology 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 Dongil Technology are associated (or correlated) with ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of Dongil Technology i.e., Dongil Technology and ENF Technology go up and down completely randomly.

Pair Corralation between Dongil Technology and ENF Technology

Assuming the 90 days trading horizon Dongil Technology is expected to generate 9.6 times less return on investment than ENF Technology. But when comparing it to its historical volatility, Dongil Technology is 3.46 times less risky than ENF Technology. It trades about 0.13 of its potential returns per unit of risk. ENF Technology Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  1,699,849  in ENF Technology Co on October 23, 2024 and sell it today you would earn a total of  395,151  from holding ENF Technology Co or generate 23.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dongil Technology  vs.  ENF Technology Co

Dongil Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dongil Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongil Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ENF Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENF Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ENF Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dongil Technology and ENF Technology

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

The idea behind Dongil Technology and ENF Technology 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.