Correlation Between Yura Tech and Dong A

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

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

Diversification Opportunities for Yura Tech and Dong A

-0.41

Correlation Coefficient

Yura Tech  Dong A

Very good diversification

The 3 months correlation between Yura and Dong is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek and Yura Tech 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 Yura Tech Co are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of Yura Tech i.e., Yura Tech and Dong A go up and down completely randomly.

Pair Corralation between Yura Tech and Dong A

Assuming the 90 days trading horizon Yura Tech Co is expected to generate 1.28 times more return on investment than Dong A. However, Yura Tech is 1.28 times more volatile than Dong A Eltek. It trades about 0.22 of its potential returns per unit of risk. Dong A Eltek is currently generating about -0.23 per unit of risk. If you would invest  636,000  in Yura Tech Co on September 26, 2024 and sell it today you would earn a total of  130,000  from holding Yura Tech Co or generate 20.44% return on investment over 90 days.

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

Yura Tech Co  vs.  Dong A Eltek

Yura Tech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yura Tech Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yura Tech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dong A Eltek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dong A Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Yura Tech and Dong A

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

The idea behind Yura Tech Co and Dong A Eltek 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.