Correlation Between DB Financial and Sajo Seafood
Can any of the company-specific risk be diversified away by investing in both DB Financial and Sajo Seafood 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 Sajo Seafood 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 Sajo Seafood, you can compare the effects of market volatilities on DB Financial and Sajo Seafood 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 Sajo Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Sajo Seafood.
Diversification Opportunities for DB Financial and Sajo Seafood
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 016610 and Sajo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Sajo Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Seafood 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 Sajo Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Seafood has no effect on the direction of DB Financial i.e., DB Financial and Sajo Seafood go up and down completely randomly.
Pair Corralation between DB Financial and Sajo Seafood
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.84 times more return on investment than Sajo Seafood. However, DB Financial Investment is 1.19 times less risky than Sajo Seafood. It trades about 0.05 of its potential returns per unit of risk. Sajo Seafood is currently generating about -0.28 per unit of risk. If you would invest 527,000 in DB Financial Investment on October 21, 2024 and sell it today you would earn a total of 5,000 from holding DB Financial Investment or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Sajo Seafood
Performance |
| Timeline |
| DB Financial Investment |
| Sajo Seafood |
DB Financial and Sajo Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Sajo Seafood
The main advantage of trading using opposite DB Financial and Sajo Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Sajo Seafood 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 Sajo Seafood will offset losses from the drop in Sajo Seafood's long position.| DB Financial vs. Sajo Seafood | DB Financial vs. Shinsegae Food | DB Financial vs. Haitai Confectionery Foods | DB Financial vs. Sam Yang Foods |
| Sajo Seafood vs. Daejoo Electronic Materials | Sajo Seafood vs. Samyoung Electronics Co | Sajo Seafood vs. Kukil Metal Co | Sajo Seafood vs. Korea Electronic Certification |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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