Correlation Between DB Financial and System
Can any of the company-specific risk be diversified away by investing in both DB Financial and System 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 System 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 System and Application, you can compare the effects of market volatilities on DB Financial and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and System.
Diversification Opportunities for DB Financial and System
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 016610 and System is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of DB Financial i.e., DB Financial and System go up and down completely randomly.
Pair Corralation between DB Financial and System
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.56 times more return on investment than System. However, DB Financial Investment is 1.78 times less risky than System. It trades about 0.03 of its potential returns per unit of risk. System and Application is currently generating about 0.0 per unit of risk. If you would invest 423,000 in DB Financial Investment on October 14, 2024 and sell it today you would earn a total of 100,000 from holding DB Financial Investment or generate 23.64% 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. System and Application
Performance |
| Timeline |
| DB Financial Investment |
| System and Application |
DB Financial and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and System
The main advantage of trading using opposite DB Financial and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| DB Financial vs. E Investment Development | DB Financial vs. NH Investment Securities | DB Financial vs. SBI Investment KOREA | DB Financial vs. Genie Music |
| System vs. DSC Investment | System vs. SV Investment | System vs. DB Financial Investment | System vs. Korea Air Svc |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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