Correlation Between Green Cross and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Green Cross and Dongil Technology 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 Green Cross and Dongil Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Dongil Technology, you can compare the effects of market volatilities on Green Cross and Dongil Technology 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 Green Cross with a short position of Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Dongil Technology.
Diversification Opportunities for Green Cross and Dongil Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Green and Dongil is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology and Green Cross 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 Green Cross Medical are associated (or correlated) with Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Green Cross i.e., Green Cross and Dongil Technology go up and down completely randomly.
Pair Corralation between Green Cross and Dongil Technology
Assuming the 90 days trading horizon Green Cross Medical is expected to under-perform the Dongil Technology. In addition to that, Green Cross is 2.43 times more volatile than Dongil Technology. It trades about -0.02 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.04 per unit of volatility. If you would invest 1,189,069 in Dongil Technology on September 13, 2024 and sell it today you would lose (168,069) from holding Dongil Technology or give up 14.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Green Cross Medical vs. Dongil Technology
Performance |
Timeline |
Green Cross Medical |
Dongil Technology |
Green Cross and Dongil Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Green Cross and Dongil Technology
The main advantage of trading using opposite Green Cross and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.Green Cross vs. Samsung Electronics Co | Green Cross vs. Samsung Electronics Co | Green Cross vs. SK Hynix | Green Cross vs. SK Holdings Co |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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