Correlation Between SH Energy and DB Financial
Can any of the company-specific risk be diversified away by investing in both SH Energy and DB Financial 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 SH Energy and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and DB Financial Investment, you can compare the effects of market volatilities on SH Energy and DB Financial 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 SH Energy with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and DB Financial.
Diversification Opportunities for SH Energy and DB Financial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 002360 and 016610 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and SH Energy 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 SH Energy Chemical are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of SH Energy i.e., SH Energy and DB Financial go up and down completely randomly.
Pair Corralation between SH Energy and DB Financial
Assuming the 90 days trading horizon SH Energy Chemical is expected to under-perform the DB Financial. In addition to that, SH Energy is 1.21 times more volatile than DB Financial Investment. It trades about -0.02 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.07 per unit of volatility. If you would invest 376,690 in DB Financial Investment on August 25, 2024 and sell it today you would earn a total of 133,310 from holding DB Financial Investment or generate 35.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. DB Financial Investment
Performance |
| Timeline |
| SH Energy Chemical |
| DB Financial Investment |
SH Energy and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and DB Financial
The main advantage of trading using opposite SH Energy and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
| DB Financial vs. PH Tech Co | DB Financial vs. BGF Retail Co | DB Financial vs. Korea Air Svc | DB Financial vs. SS TECH |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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