Correlation Between DB Financial and Husteel
Can any of the company-specific risk be diversified away by investing in both DB Financial and Husteel 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 Financial and Husteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Financial Investment and Husteel, you can compare the effects of market volatilities on DB Financial and Husteel 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 Financial with a short position of Husteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Husteel.
Diversification Opportunities for DB Financial and Husteel
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between 016610 and Husteel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Husteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husteel and DB Financial 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 Financial Investment are associated (or correlated) with Husteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husteel has no effect on the direction of DB Financial i.e., DB Financial and Husteel go up and down completely randomly.
Pair Corralation between DB Financial and Husteel
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.81 times more return on investment than Husteel. However, DB Financial Investment is 1.24 times less risky than Husteel. It trades about 0.06 of its potential returns per unit of risk. Husteel is currently generating about -0.02 per unit of risk. If you would invest 389,580 in DB Financial Investment on September 12, 2024 and sell it today you would earn a total of 130,420 from holding DB Financial Investment or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Husteel
Performance |
| Timeline |
| DB Financial Investment |
| Husteel |
DB Financial and Husteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Husteel
The main advantage of trading using opposite DB Financial and Husteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Husteel 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 Husteel will offset losses from the drop in Husteel's long position.| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
| Husteel vs. LG Chemicals | Husteel vs. POSCO Holdings | Husteel vs. Hanwha Solutions | Husteel vs. Lotte Chemical Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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