Correlation Between Daewoo SBI and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Dongsin Engineering 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 SBI and Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Dongsin Engineering Construction, you can compare the effects of market volatilities on Daewoo SBI and Dongsin Engineering 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 SBI with a short position of Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Dongsin Engineering.
Diversification Opportunities for Daewoo SBI and Dongsin Engineering
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and Dongsin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering and Daewoo SBI 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 SBI SPAC are associated (or correlated) with Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Dongsin Engineering go up and down completely randomly.
Pair Corralation between Daewoo SBI and Dongsin Engineering
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to generate 0.42 times more return on investment than Dongsin Engineering. However, Daewoo SBI SPAC is 2.41 times less risky than Dongsin Engineering. It trades about -0.18 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about -0.23 per unit of risk. If you would invest 305,000 in Daewoo SBI SPAC on April 25, 2025 and sell it today you would lose (69,000) from holding Daewoo SBI SPAC or give up 22.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Daewoo SBI SPAC vs. Dongsin Engineering Constructi
Performance |
Timeline |
Daewoo SBI SPAC |
Dongsin Engineering |
Daewoo SBI and Dongsin Engineering Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daewoo SBI and Dongsin Engineering
The main advantage of trading using opposite Daewoo SBI and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.Daewoo SBI vs. Intellian Technologies | Daewoo SBI vs. Nice Information Telecommunication | Daewoo SBI vs. Wonbang Tech Co | Daewoo SBI vs. MS Autotech CoLtd |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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