Correlation Between DB Financial and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both DB Financial and Dongil Technology 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 Dongil Technology 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 Dongil Technology, you can compare the effects of market volatilities on DB Financial and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Dongil Technology.
Diversification Opportunities for DB Financial and Dongil Technology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 016610 and Dongil is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of DB Financial i.e., DB Financial and Dongil Technology go up and down completely randomly.
Pair Corralation between DB Financial and Dongil Technology
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 1.46 times more return on investment than Dongil Technology. However, DB Financial is 1.46 times more volatile than Dongil Technology. It trades about -0.16 of its potential returns per unit of risk. Dongil Technology is currently generating about -0.25 per unit of risk. If you would invest 538,000 in DB Financial Investment on August 30, 2024 and sell it today you would lose (26,000) from holding DB Financial Investment or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Dongil Technology
Performance |
| Timeline |
| DB Financial Investment |
| Dongil Technology |
DB Financial and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Dongil Technology
The main advantage of trading using opposite DB Financial and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.| DB Financial vs. Hannong Chemicals | DB Financial vs. Tway Air Co | DB Financial vs. Haitai Confectionery Foods | DB Financial vs. Innowireless Co |
| Dongil Technology vs. Daou Data Corp | Dongil Technology vs. Busan Industrial Co | Dongil Technology vs. Busan Ind | Dongil Technology vs. Shinhan WTI Futures |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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