Correlation Between Chesapeake Granite and Dongwoon Anatech

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

By analyzing existing cross correlation between Chesapeake Granite Wash and Dongwoon Anatech Co, you can compare the effects of market volatilities on Chesapeake Granite and Dongwoon Anatech 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 Chesapeake Granite with a short position of Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Granite and Dongwoon Anatech.

Diversification Opportunities for Chesapeake Granite and Dongwoon Anatech

0.31

Correlation Coefficient

Chesapeake Granite  Dongwoon Anatech

Weak diversification

The 3 months correlation between Chesapeake and Dongwoon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech and Chesapeake Granite 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 Chesapeake Granite Wash are associated (or correlated) with Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Chesapeake Granite i.e., Chesapeake Granite and Dongwoon Anatech go up and down completely randomly.

Pair Corralation between Chesapeake Granite and Dongwoon Anatech

If you would invest  1,605,219  in Dongwoon Anatech Co on October 6, 2024 and sell it today you would earn a total of  309,781  from holding Dongwoon Anatech Co or generate 19.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Chesapeake Granite Wash  vs.  Dongwoon Anatech Co

Chesapeake Granite Wash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chesapeake Granite Wash has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Chesapeake Granite is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Dongwoon Anatech

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Chesapeake Granite and Dongwoon Anatech

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

The idea behind Chesapeake Granite Wash and Dongwoon Anatech 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.