Correlation Between Keyang Electric and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Keyang Electric 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 Keyang Electric and Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Dgb Financial, you can compare the effects of market volatilities on Keyang Electric 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 Keyang Electric with a short position of Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Dgb Financial.
Diversification Opportunities for Keyang Electric and Dgb Financial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Keyang and Dgb is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and Keyang Electric 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 Keyang Electric Machinery 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 Keyang Electric i.e., Keyang Electric and Dgb Financial go up and down completely randomly.
Pair Corralation between Keyang Electric and Dgb Financial
Assuming the 90 days trading horizon Keyang Electric Machinery is expected to generate 1.83 times more return on investment than Dgb Financial. However, Keyang Electric is 1.83 times more volatile than Dgb Financial. It trades about 0.04 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.05 per unit of risk. If you would invest 369,000 in Keyang Electric Machinery on October 30, 2024 and sell it today you would earn a total of 10,500 from holding Keyang Electric Machinery or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Dgb Financial
Performance |
| Timeline |
| Keyang Electric Machinery |
| Dgb Financial |
Keyang Electric and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Dgb Financial
The main advantage of trading using opposite Keyang Electric and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric 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.| Keyang Electric vs. Iljin Display | Keyang Electric vs. Seohee Construction Co | Keyang Electric vs. Daesung Hi Tech Co | Keyang Electric vs. Sungdo Engineering Construction |
| Dgb Financial vs. Ssangyong Materials Corp | Dgb Financial vs. Top Material Co | Dgb Financial vs. PI Advanced Materials | Dgb Financial vs. Inzi Display CoLtd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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