Correlation Between DB Financial and Nice Information
Can any of the company-specific risk be diversified away by investing in both DB Financial and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on DB Financial and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Nice Information.
Diversification Opportunities for DB Financial and Nice Information
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 016610 and Nice is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of DB Financial i.e., DB Financial and Nice Information go up and down completely randomly.
Pair Corralation between DB Financial and Nice Information
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 6.32 times more return on investment than Nice Information. However, DB Financial is 6.32 times more volatile than Nice Information Telecommunication. It trades about 0.04 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.19 per unit of risk. If you would invest 482,000 in DB Financial Investment on August 25, 2024 and sell it today you would earn a total of 28,000 from holding DB Financial Investment or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Nice Information Telecommunica
Performance |
| Timeline |
| DB Financial Investment |
| Nice Information Tel |
DB Financial and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Nice Information
The main advantage of trading using opposite DB Financial and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| DB Financial vs. Korea New Network | DB Financial vs. Dong A Eltek | DB Financial vs. Dreamus Company | DB Financial vs. SK Bioscience Co |
| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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