Correlation Between DB Financial and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both DB Financial and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on DB Financial and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Sambo Corrugated.
Diversification Opportunities for DB Financial and Sambo Corrugated
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 016610 and Sambo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of DB Financial i.e., DB Financial and Sambo Corrugated go up and down completely randomly.
Pair Corralation between DB Financial and Sambo Corrugated
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 1.73 times more return on investment than Sambo Corrugated. However, DB Financial is 1.73 times more volatile than Sambo Corrugated Board. It trades about -0.02 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.23 per unit of risk. If you would invest 540,000 in DB Financial Investment on October 25, 2024 and sell it today you would lose (3,000) from holding DB Financial Investment or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
DB Financial Investment vs. Sambo Corrugated Board
Performance |
| Timeline |
| DB Financial Investment |
| Sambo Corrugated Board |
DB Financial and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Sambo Corrugated
The main advantage of trading using opposite DB Financial and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| DB Financial vs. Korea Shipbuilding Offshore | DB Financial vs. LG Household Healthcare | DB Financial vs. Mobile Appliance | DB Financial vs. InnoTherapy |
| Sambo Corrugated vs. KyungIn Electronics Co | Sambo Corrugated vs. Jahwa Electronics Co | Sambo Corrugated vs. DB Financial Investment | Sambo Corrugated vs. Samsung Electronics Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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