Correlation Between DB Financial and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both DB Financial and GaeaSoft Corp 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 GaeaSoft Corp 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 GaeaSoft Corp, you can compare the effects of market volatilities on DB Financial and GaeaSoft Corp 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 GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and GaeaSoft Corp.
Diversification Opportunities for DB Financial and GaeaSoft Corp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 016610 and GaeaSoft is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp 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 GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of DB Financial i.e., DB Financial and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between DB Financial and GaeaSoft Corp
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.91 times more return on investment than GaeaSoft Corp. However, DB Financial Investment is 1.1 times less risky than GaeaSoft Corp. It trades about 0.08 of its potential returns per unit of risk. GaeaSoft Corp is currently generating about -0.04 per unit of risk. If you would invest 414,500 in DB Financial Investment on September 3, 2024 and sell it today you would earn a total of 101,500 from holding DB Financial Investment or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. GaeaSoft Corp
Performance |
| Timeline |
| DB Financial Investment |
| GaeaSoft Corp |
DB Financial and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and GaeaSoft Corp
The main advantage of trading using opposite DB Financial and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, GaeaSoft Corp 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp'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 |
| GaeaSoft Corp vs. Dongil Technology | GaeaSoft Corp vs. KG Eco Technology | GaeaSoft Corp vs. DB Financial Investment | GaeaSoft Corp vs. Puloon Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |