Correlation Between Techno Agricultural and Dong A

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

By analyzing existing cross correlation between Techno Agricultural Supplying and Dong A Hotel, you can compare the effects of market volatilities on Techno Agricultural 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 Techno Agricultural with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techno Agricultural and Dong A.

Diversification Opportunities for Techno Agricultural and Dong A

0.57

Correlation Coefficient

Techno Agricultural  Dong A

Very weak diversification

The 3 months correlation between Techno and Dong is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Techno Agricultural Supplying and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel and Techno Agricultural 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 Techno Agricultural Supplying 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 Hotel has no effect on the direction of Techno Agricultural i.e., Techno Agricultural and Dong A go up and down completely randomly.

Pair Corralation between Techno Agricultural and Dong A

Assuming the 90 days trading horizon Techno Agricultural Supplying is expected to under-perform the Dong A. In addition to that, Techno Agricultural is 1.16 times more volatile than Dong A Hotel. It trades about -0.1 of its total potential returns per unit of risk. Dong A Hotel is currently generating about -0.05 per unit of volatility. If you would invest  534,000  in Dong A Hotel on December 5, 2024 and sell it today you would lose (175,000) from holding Dong A Hotel or give up 32.77% of portfolio value over 90 days.

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

Techno Agricultural Supplying  vs.  Dong A Hotel

Techno Agricultural

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Techno Agricultural Supplying are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Techno Agricultural may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dong A Hotel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dong A Hotel are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Dong A displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Techno Agricultural and Dong A

The main advantage of trading using opposite Techno Agricultural and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techno Agricultural 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 Techno Agricultural Supplying and Dong A Hotel 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.