Correlation Between Nobland International and Dongbang Transport

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

By analyzing existing cross correlation between Nobland International and Dongbang Transport Logistics, you can compare the effects of market volatilities on Nobland International and Dongbang Transport 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 Nobland International with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobland International and Dongbang Transport.

Diversification Opportunities for Nobland International and Dongbang Transport

-0.3

Correlation Coefficient

Nobland International  Dongbang Transport

Very good diversification

The 3 months correlation between Nobland and Dongbang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nobland International and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Nobland International 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 Nobland International are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Nobland International i.e., Nobland International and Dongbang Transport go up and down completely randomly.

Pair Corralation between Nobland International and Dongbang Transport

Assuming the 90 days trading horizon Nobland International is expected to under-perform the Dongbang Transport. In addition to that, Nobland International is 1.4 times more volatile than Dongbang Transport Logistics. It trades about -0.1 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.02 per unit of volatility. If you would invest  231,000  in Dongbang Transport Logistics on October 9, 2024 and sell it today you would lose (5,500) from holding Dongbang Transport Logistics or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.47%
Values	Daily Returns

Nobland International  vs.  Dongbang Transport Logistics

Nobland International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nobland International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nobland International sustained solid returns over the last few months and may actually be approaching a breakup point.

Dongbang Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dongbang Transport Logistics 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nobland International and Dongbang Transport

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

The idea behind Nobland International and Dongbang Transport Logistics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.