Correlation Between DB Financial and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both DB Financial and Dongsin Engineering 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 Dongsin Engineering 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 Dongsin Engineering Construction, you can compare the effects of market volatilities on DB Financial and Dongsin Engineering 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 Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Dongsin Engineering.
Diversification Opportunities for DB Financial and Dongsin Engineering
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 016610 and Dongsin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering 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 Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of DB Financial i.e., DB Financial and Dongsin Engineering go up and down completely randomly.
Pair Corralation between DB Financial and Dongsin Engineering
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.56 times more return on investment than Dongsin Engineering. However, DB Financial Investment is 1.8 times less risky than Dongsin Engineering. It trades about 0.07 of its potential returns per unit of risk. Dongsin Engineering Construction is currently generating about 0.02 per unit of risk. If you would invest 421,500 in DB Financial Investment on September 3, 2024 and sell it today you would earn a total of 94,500 from holding DB Financial Investment or generate 22.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| DB Financial Investment |
| Dongsin Engineering |
DB Financial and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Dongsin Engineering
The main advantage of trading using opposite DB Financial and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| DB Financial vs. CU Medical Systems | DB Financial vs. Neungyule Education | DB Financial vs. Samsung Publishing Co | DB Financial vs. Dongbang Transport Logistics |
| Dongsin Engineering vs. DB Financial Investment | Dongsin Engineering vs. EBEST Investment Securities | Dongsin Engineering vs. Stic Investments | Dongsin Engineering vs. Sangsangin Investment Securities |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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