Correlation Between DB Financial and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both DB Financial and Ssangyong Information 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 Ssangyong Information 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 Ssangyong Information Communication, you can compare the effects of market volatilities on DB Financial and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Ssangyong Information.
Diversification Opportunities for DB Financial and Ssangyong Information
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 016610 and Ssangyong is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of DB Financial i.e., DB Financial and Ssangyong Information go up and down completely randomly.
Pair Corralation between DB Financial and Ssangyong Information
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 1.08 times more return on investment than Ssangyong Information. However, DB Financial is 1.08 times more volatile than Ssangyong Information Communication. It trades about 0.55 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.21 per unit of risk. If you would invest 546,000 in DB Financial Investment on November 28, 2024 and sell it today you would earn a total of 61,000 from holding DB Financial Investment or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
DB Financial Investment vs. Ssangyong Information Communic
Performance |
| Timeline |
| DB Financial Investment |
| Ssangyong Information |
DB Financial and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Ssangyong Information
The main advantage of trading using opposite DB Financial and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| DB Financial vs. SV Investment | DB Financial vs. Dongbang Transport Logistics | DB Financial vs. Handok Clean Tech | DB Financial vs. Nh Investment And |
| Ssangyong Information vs. INFINITT Healthcare Co | Ssangyong Information vs. Lotte Non Life Insurance | Ssangyong Information vs. Industrial Bank | Ssangyong Information vs. CKH Food Health |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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