Correlation Between DB Financial and Korea Ratings
Can any of the company-specific risk be diversified away by investing in both DB Financial and Korea Ratings 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 Korea Ratings 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 Korea Ratings Co, you can compare the effects of market volatilities on DB Financial and Korea Ratings 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 Korea Ratings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Korea Ratings.
Diversification Opportunities for DB Financial and Korea Ratings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 016610 and Korea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Korea Ratings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Ratings 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 Korea Ratings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Ratings has no effect on the direction of DB Financial i.e., DB Financial and Korea Ratings go up and down completely randomly.
Pair Corralation between DB Financial and Korea Ratings
Assuming the 90 days trading horizon DB Financial is expected to generate 1.13 times less return on investment than Korea Ratings. In addition to that, DB Financial is 2.37 times more volatile than Korea Ratings Co. It trades about 0.04 of its total potential returns per unit of risk. Korea Ratings Co is currently generating about 0.1 per unit of volatility. If you would invest 6,332,298 in Korea Ratings Co on September 13, 2024 and sell it today you would earn a total of 2,487,702 from holding Korea Ratings Co or generate 39.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Korea Ratings Co
Performance |
| Timeline |
| DB Financial Investment |
| Korea Ratings |
DB Financial and Korea Ratings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Korea Ratings
The main advantage of trading using opposite DB Financial and Korea Ratings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Korea Ratings 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 Korea Ratings will offset losses from the drop in Korea Ratings' long position.| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
| Korea Ratings vs. DB Financial Investment | Korea Ratings vs. Daelim Trading Co | Korea Ratings vs. Finebesteel | Korea Ratings vs. E Investment Development |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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