Correlation Between Daiyang Metal and DB Financial
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal 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 Daiyang Metal and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and DB Financial Investment, you can compare the effects of market volatilities on Daiyang Metal 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 Daiyang Metal with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and DB Financial.
Diversification Opportunities for Daiyang Metal and DB Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daiyang and 016610 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co 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 Daiyang Metal 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 Daiyang Metal Co 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 Daiyang Metal i.e., Daiyang Metal and DB Financial go up and down completely randomly.
Pair Corralation between Daiyang Metal and DB Financial
Assuming the 90 days trading horizon Daiyang Metal is expected to generate 1.23 times less return on investment than DB Financial. In addition to that, Daiyang Metal is 1.73 times more volatile than DB Financial Investment. It trades about 0.03 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 516,000 in DB Financial Investment on October 30, 2024 and sell it today you would earn a total of 23,000 from holding DB Financial Investment or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. DB Financial Investment
Performance |
| Timeline |
| Daiyang Metal |
| DB Financial Investment |
Daiyang Metal and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and DB Financial
The main advantage of trading using opposite Daiyang Metal and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal 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.| Daiyang Metal vs. Daou Technology | Daiyang Metal vs. BIT Computer Co | Daiyang Metal vs. Solution Advanced Technology | Daiyang Metal vs. Daewon Chemical Co |
| DB Financial vs. Hanjoo Light Metal | DB Financial vs. Duksan Hi Metal | DB Financial vs. Netmarble Games Corp | DB Financial vs. Kukil Metal 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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