Correlation Between Songwon Industrial and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Dgb 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 Songwon Industrial and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and Dgb Financial, you can compare the effects of market volatilities on Songwon Industrial and Dgb 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 Songwon Industrial with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Dgb Financial.
Diversification Opportunities for Songwon Industrial and Dgb Financial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Songwon and Dgb is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Dgb Financial go up and down completely randomly.
Pair Corralation between Songwon Industrial and Dgb Financial
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 1.7 times more return on investment than Dgb Financial. However, Songwon Industrial is 1.7 times more volatile than Dgb Financial. It trades about 0.15 of its potential returns per unit of risk. Dgb Financial is currently generating about -0.05 per unit of risk. If you would invest 1,116,000 in Songwon Industrial Co on October 16, 2024 and sell it today you would earn a total of 80,000 from holding Songwon Industrial Co or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. Dgb Financial
Performance |
| Timeline |
| Songwon Industrial |
| Dgb Financial |
Songwon Industrial and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Dgb Financial
The main advantage of trading using opposite Songwon Industrial and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Dgb 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Songwon Industrial vs. DB Insurance Co | Songwon Industrial vs. TS Investment Corp | Songwon Industrial vs. Shinhan Financial Group | Songwon Industrial vs. SV Investment |
| Dgb Financial vs. Keyang Electric Machinery | Dgb Financial vs. InnoTherapy | Dgb Financial vs. Dongkuk Structures Construction | Dgb Financial vs. LG Household Healthcare |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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