Correlation Between Display Tech and Dongbang Transport

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

By analyzing existing cross correlation between Display Tech Co and Dongbang Transport Logistics, you can compare the effects of market volatilities on Display Tech and Dongbang Transport 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 Display Tech with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Dongbang Transport.

Diversification Opportunities for Display Tech and Dongbang Transport

0.69

Correlation Coefficient

Display Tech  Dongbang Transport

Poor diversification

The 3 months correlation between Display and Dongbang is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Display Tech 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 Display Tech Co are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Display Tech i.e., Display Tech and Dongbang Transport go up and down completely randomly.

Pair Corralation between Display Tech and Dongbang Transport

Assuming the 90 days trading horizon Display Tech is expected to generate 5.15 times less return on investment than Dongbang Transport. But when comparing it to its historical volatility, Display Tech Co is 4.13 times less risky than Dongbang Transport. It trades about 0.14 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  252,000  in Dongbang Transport Logistics on April 25, 2025 and sell it today you would earn a total of  106,000  from holding Dongbang Transport Logistics or generate 42.06% return on investment over 90 days.

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

Display Tech Co  vs.  Dongbang Transport Logistics

Display Tech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Display Tech Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Display Tech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dongbang Transport

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dongbang Transport Logistics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dongbang Transport sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Display Tech and Dongbang Transport

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

The idea behind Display Tech Co and Dongbang Transport Logistics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.