Correlation Between DB Financial and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both DB Financial and Heungkuk Metaltech 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 Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on DB Financial and Heungkuk Metaltech 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 Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Heungkuk Metaltech.
Diversification Opportunities for DB Financial and Heungkuk Metaltech
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 016610 and Heungkuk is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of DB Financial i.e., DB Financial and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between DB Financial and Heungkuk Metaltech
Assuming the 90 days trading horizon DB Financial is expected to generate 1.58 times less return on investment than Heungkuk Metaltech. But when comparing it to its historical volatility, DB Financial Investment is 1.45 times less risky than Heungkuk Metaltech. It trades about 0.24 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 460,000 in Heungkuk Metaltech CoLtd on September 14, 2024 and sell it today you would earn a total of 80,000 from holding Heungkuk Metaltech CoLtd or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| DB Financial Investment |
| Heungkuk Metaltech CoLtd |
DB Financial and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Heungkuk Metaltech
The main advantage of trading using opposite DB Financial and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech'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 |
| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. Solution Advanced Technology | Heungkuk Metaltech vs. Busan Industrial Co | Heungkuk Metaltech vs. Busan Ind |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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