Correlation Between Hankukpackage and Dong Il

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

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

Diversification Opportunities for Hankukpackage and Dong Il

-0.34

Correlation Coefficient

Hankukpackage  Dong Il

Very good diversification

The 3 months correlation between Hankukpackage and Dong is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hankukpackage Co and Dong Il Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong Il Corp and Hankukpackage 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 Hankukpackage Co are associated (or correlated) with Dong Il. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong Il Corp has no effect on the direction of Hankukpackage i.e., Hankukpackage and Dong Il go up and down completely randomly.

Pair Corralation between Hankukpackage and Dong Il

Assuming the 90 days trading horizon Hankukpackage Co is expected to under-perform the Dong Il. But the stock apears to be less risky and, when comparing its historical volatility, Hankukpackage Co is 1.04 times less risky than Dong Il. The stock trades about -0.06 of its potential returns per unit of risk. The Dong Il Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  3,660,000  in Dong Il Corp on September 28, 2024 and sell it today you would earn a total of  1,460,000  from holding Dong Il Corp or generate 39.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Hankukpackage Co  vs.  Dong Il Corp

Hankukpackage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hankukpackage Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Dong Il Corp

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dong Il Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dong Il sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hankukpackage and Dong Il

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

The idea behind Hankukpackage Co and Dong Il Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.