Correlation Between Dongil Metal and Dongsin Engineering

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

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

Diversification Opportunities for Dongil Metal and Dongsin Engineering

-0.26

Correlation Coefficient

Dongil Metal  Dongsin Engineering

Very good diversification

The 3 months correlation between Dongil and Dongsin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Dongil Metal 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 Metal Co 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 Dongil Metal i.e., Dongil Metal and Dongsin Engineering go up and down completely randomly.

Pair Corralation between Dongil Metal and Dongsin Engineering

Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.33 times more return on investment than Dongsin Engineering. However, Dongil Metal Co is 2.99 times less risky than Dongsin Engineering. It trades about 0.07 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.01 per unit of risk. If you would invest  768,701  in Dongil Metal Co on December 24, 2024 and sell it today you would earn a total of  55,299  from holding Dongil Metal Co or generate 7.19% return on investment over 90 days.

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

Dongil Metal Co  vs.  Dongsin Engineering Constructi

Dongil Metal

Risk-Adjusted Performance

Modest

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

Dongsin Engineering

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Dongil Metal and Dongsin Engineering

The main advantage of trading using opposite Dongil Metal and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal 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.

The idea behind Dongil Metal Co and Dongsin Engineering Construction 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.