Correlation Between Osang Healthcare and Dongil Metal

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

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

Diversification Opportunities for Osang Healthcare and Dongil Metal

0.26

Correlation Coefficient

Osang Healthcare  Dongil Metal

Modest diversification

The 3 months correlation between Osang and Dongil is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal and Osang Healthcare 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 Osang Healthcare Co,Ltd are associated (or correlated) with Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Osang Healthcare i.e., Osang Healthcare and Dongil Metal go up and down completely randomly.

Pair Corralation between Osang Healthcare and Dongil Metal

Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to generate 2.35 times more return on investment than Dongil Metal. However, Osang Healthcare is 2.35 times more volatile than Dongil Metal Co. It trades about 0.09 of its potential returns per unit of risk. Dongil Metal Co is currently generating about 0.0 per unit of risk. If you would invest  1,140,000  in Osang Healthcare Co,Ltd on December 31, 2024 and sell it today you would earn a total of  227,000  from holding Osang Healthcare Co,Ltd or generate 19.91% return on investment over 90 days.

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

Osang Healthcare Co,Ltd  vs.  Dongil Metal Co

Osang Healthcare Co,Ltd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Osang Healthcare Co,Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Osang Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Dongil Metal

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Osang Healthcare and Dongil Metal

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

The idea behind Osang Healthcare Co,Ltd and Dongil Metal 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.