Correlation Between Daewoo Engineering and Bumyang Construction
Can any of the company-specific risk be diversified away by investing in both Daewoo Engineering and Bumyang Construction 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 Daewoo Engineering and Bumyang Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Engineering Construction and Bumyang Construction Co, you can compare the effects of market volatilities on Daewoo Engineering and Bumyang Construction 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 Daewoo Engineering with a short position of Bumyang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Engineering and Bumyang Construction.
Diversification Opportunities for Daewoo Engineering and Bumyang Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daewoo and Bumyang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Engineering Constructio and Bumyang Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumyang Construction and Daewoo Engineering 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 Daewoo Engineering Construction are associated (or correlated) with Bumyang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumyang Construction has no effect on the direction of Daewoo Engineering i.e., Daewoo Engineering and Bumyang Construction go up and down completely randomly.
Pair Corralation between Daewoo Engineering and Bumyang Construction
If you would invest 337,500 in Daewoo Engineering Construction on April 25, 2025 and sell it today you would earn a total of 58,500 from holding Daewoo Engineering Construction or generate 17.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daewoo Engineering Constructio vs. Bumyang Construction Co
Performance |
Timeline |
Daewoo Engineering |
Bumyang Construction |
Daewoo Engineering and Bumyang Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daewoo Engineering and Bumyang Construction
The main advantage of trading using opposite Daewoo Engineering and Bumyang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Engineering position performs unexpectedly, Bumyang Construction 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 Bumyang Construction will offset losses from the drop in Bumyang Construction's long position.Daewoo Engineering vs. LG Chemicals | Daewoo Engineering vs. Hana Financial | Daewoo Engineering vs. KakaoBank Corp | Daewoo Engineering vs. Pureun Mutual Savings |
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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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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