Correlation Between DSC Investment and DONGKUK TED

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

By analyzing existing cross correlation between DSC Investment and DONGKUK TED METAL, you can compare the effects of market volatilities on DSC Investment and DONGKUK TED 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 DSC Investment with a short position of DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and DONGKUK TED.

Diversification Opportunities for DSC Investment and DONGKUK TED

0.08

Correlation Coefficient

DSC Investment  DONGKUK TED

Significant diversification

The 3 months correlation between DSC and DONGKUK is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL and DSC Investment 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 DSC Investment are associated (or correlated) with DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of DSC Investment i.e., DSC Investment and DONGKUK TED go up and down completely randomly.

Pair Corralation between DSC Investment and DONGKUK TED

Assuming the 90 days trading horizon DSC Investment is expected to generate 1.6 times more return on investment than DONGKUK TED. However, DSC Investment is 1.6 times more volatile than DONGKUK TED METAL. It trades about 0.27 of its potential returns per unit of risk. DONGKUK TED METAL is currently generating about 0.36 per unit of risk. If you would invest  259,422  in DSC Investment on October 9, 2024 and sell it today you would earn a total of  33,578  from holding DSC Investment or generate 12.94% return on investment over 90 days.

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

DSC Investment  vs.  DONGKUK TED METAL

DSC Investment

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DSC Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DSC Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DONGKUK TED METAL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DSC Investment and DONGKUK TED

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

The idea behind DSC Investment and DONGKUK TED METAL 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.