Correlation Between DB HiTek and SV Investment
Can any of the company-specific risk be diversified away by investing in both DB HiTek and SV Investment 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 DB HiTek and SV Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB HiTek Co and SV Investment, you can compare the effects of market volatilities on DB HiTek and SV Investment 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 DB HiTek with a short position of SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB HiTek and SV Investment.
Diversification Opportunities for DB HiTek and SV Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 000990 and 289080 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DB HiTek Co and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment and DB HiTek 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 DB HiTek Co are associated (or correlated) with SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of DB HiTek i.e., DB HiTek and SV Investment go up and down completely randomly.
Pair Corralation between DB HiTek and SV Investment
Assuming the 90 days trading horizon DB HiTek Co is expected to generate 1.58 times more return on investment than SV Investment. However, DB HiTek is 1.58 times more volatile than SV Investment. It trades about 0.05 of its potential returns per unit of risk. SV Investment is currently generating about 0.06 per unit of risk. If you would invest 3,360,000 in DB HiTek Co on October 23, 2024 and sell it today you would earn a total of 55,000 from holding DB HiTek Co or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
DB HiTek Co vs. SV Investment
Performance |
| Timeline |
| DB HiTek |
| SV Investment |
DB HiTek and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB HiTek and SV Investment
The main advantage of trading using opposite DB HiTek and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB HiTek position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| DB HiTek vs. Ilji Technology Co | DB HiTek vs. Ssangyong Information Communication | DB HiTek vs. Koh Young Technology | DB HiTek vs. Guyoung Technology Co |
| SV Investment vs. Sempio Foods Co | SV Investment vs. Seoul Food Industrial | SV Investment vs. Sajo Seafood | SV Investment vs. DB Insurance Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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