Correlation Between DB Financial and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both DB Financial and Okins Electronics 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 Okins Electronics 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 Okins Electronics Co, you can compare the effects of market volatilities on DB Financial and Okins Electronics 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 Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Okins Electronics.
Diversification Opportunities for DB Financial and Okins Electronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 016610 and Okins is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of DB Financial i.e., DB Financial and Okins Electronics go up and down completely randomly.
Pair Corralation between DB Financial and Okins Electronics
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.92 times more return on investment than Okins Electronics. However, DB Financial Investment is 1.09 times less risky than Okins Electronics. It trades about 0.03 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 497,000 in DB Financial Investment on September 3, 2024 and sell it today you would earn a total of 19,000 from holding DB Financial Investment or generate 3.82% 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. Okins Electronics Co
Performance |
| Timeline |
| DB Financial Investment |
| Okins Electronics |
DB Financial and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Okins Electronics
The main advantage of trading using opposite DB Financial and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Okins Electronics 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 Okins Electronics will offset losses from the drop in Okins Electronics' 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 |
| Okins Electronics vs. DB Financial Investment | Okins Electronics vs. Polaris Office Corp | Okins Electronics vs. Innowireless Co | Okins Electronics vs. NICE Information Service |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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