Correlation Between DB Financial and Danal
Can any of the company-specific risk be diversified away by investing in both DB Financial and Danal 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 Danal 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 Danal Co, you can compare the effects of market volatilities on DB Financial and Danal 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 Danal. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Danal.
Diversification Opportunities for DB Financial and Danal
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 016610 and Danal is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Danal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danal 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 Danal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danal has no effect on the direction of DB Financial i.e., DB Financial and Danal go up and down completely randomly.
Pair Corralation between DB Financial and Danal
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.71 times more return on investment than Danal. However, DB Financial Investment is 1.41 times less risky than Danal. It trades about -0.11 of its potential returns per unit of risk. Danal Co is currently generating about -0.1 per unit of risk. If you would invest 536,000 in DB Financial Investment on August 31, 2024 and sell it today you would lose (19,000) from holding DB Financial Investment or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DB Financial Investment vs. Danal Co
Performance |
| Timeline |
| DB Financial Investment |
| Danal |
DB Financial and Danal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Danal
The main advantage of trading using opposite DB Financial and Danal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Danal 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 Danal will offset losses from the drop in Danal's long position.| DB Financial vs. TOPMATERIAL LTD | DB Financial vs. Union Materials Corp | DB Financial vs. SCI Information Service | DB Financial vs. National Plastic Co |
| Danal vs. Genie Music | Danal vs. Samick Musical Instruments | Danal vs. Jb Financial | Danal vs. DB Financial Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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