Correlation Between Dongil Metal and MEDICOX

Can any of the company-specific risk be diversified away by investing in both Dongil Metal and MEDICOX 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 MEDICOX 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 MEDICOX Co, you can compare the effects of market volatilities on Dongil Metal and MEDICOX 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 MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and MEDICOX.

Diversification Opportunities for Dongil Metal and MEDICOX

-0.02

Correlation Coefficient

Dongil Metal  MEDICOX

Good diversification

The 3 months correlation between Dongil and MEDICOX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX 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 MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of Dongil Metal i.e., Dongil Metal and MEDICOX go up and down completely randomly.

Pair Corralation between Dongil Metal and MEDICOX

Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.41 times more return on investment than MEDICOX. However, Dongil Metal Co is 2.42 times less risky than MEDICOX. It trades about 0.1 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.04 per unit of risk. If you would invest  822,862  in Dongil Metal Co on October 26, 2024 and sell it today you would earn a total of  80,138  from holding Dongil Metal Co or generate 9.74% 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.  MEDICOX Co

Dongil Metal

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dongil Metal Co are ranked lower than 7 (%) 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 February 2025.

MEDICOX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDICOX 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.

Pair Trading with Dongil Metal and MEDICOX

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

The idea behind Dongil Metal Co and MEDICOX 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.