Correlation Between Innometry and DongWon Development

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

By analyzing existing cross correlation between Innometry Co and DongWon Development CoLtd, you can compare the effects of market volatilities on Innometry and DongWon Development 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 Innometry with a short position of DongWon Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and DongWon Development.

Diversification Opportunities for Innometry and DongWon Development

0.0

Correlation Coefficient

Innometry  DongWon Development

Pay attention - limited upside

The 3 months correlation between Innometry and DongWon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and DongWon Development CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DongWon Development CoLtd and Innometry 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 Innometry Co are associated (or correlated) with DongWon Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DongWon Development CoLtd has no effect on the direction of Innometry i.e., Innometry and DongWon Development go up and down completely randomly.

Pair Corralation between Innometry and DongWon Development

If you would invest (100.00) in DongWon Development CoLtd on September 4, 2024 and sell it today you would earn a total of  100.00  from holding DongWon Development CoLtd or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Innometry Co  vs.  DongWon Development CoLtd

Innometry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innometry Co 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DongWon Development CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Innometry and DongWon Development

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

The idea behind Innometry Co and DongWon Development CoLtd 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.