Correlation Between V One and Dong A

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

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

Diversification Opportunities for V One and Dong A

0.14

Correlation Coefficient

V One  Dong A

Average diversification

The 3 months correlation between 251630 and Dong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding V One Tech Co and Dong A Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Steel and V One 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 V One 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 Steel has no effect on the direction of V One i.e., V One and Dong A go up and down completely randomly.

Pair Corralation between V One and Dong A

Assuming the 90 days trading horizon V One Tech Co is expected to generate 1.22 times more return on investment than Dong A. However, V One is 1.22 times more volatile than Dong A Steel Technology. It trades about -0.01 of its potential returns per unit of risk. Dong A Steel Technology is currently generating about -0.02 per unit of risk. If you would invest  727,778  in V One Tech Co on October 26, 2024 and sell it today you would lose (254,778) from holding V One Tech Co or give up 35.01% of portfolio value over 90 days.

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

V One Tech Co  vs.  Dong A Steel Technology

V One Tech

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V One Tech Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V One sustained solid returns over the last few months and may actually be approaching a breakup point.

Dong A Steel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dong A Steel Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Dong A is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with V One and Dong A

The main advantage of trading using opposite V One and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V One 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 V One Tech Co and Dong A Steel Technology 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.