Correlation Between DB Financial and Daehan Steel
Can any of the company-specific risk be diversified away by investing in both DB Financial and Daehan Steel 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 Daehan Steel 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 Daehan Steel, you can compare the effects of market volatilities on DB Financial and Daehan Steel 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 Daehan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Daehan Steel.
Diversification Opportunities for DB Financial and Daehan Steel
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 016610 and Daehan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Daehan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Steel 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 Daehan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Steel has no effect on the direction of DB Financial i.e., DB Financial and Daehan Steel go up and down completely randomly.
Pair Corralation between DB Financial and Daehan Steel
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.95 times more return on investment than Daehan Steel. However, DB Financial Investment is 1.05 times less risky than Daehan Steel. It trades about 0.04 of its potential returns per unit of risk. Daehan Steel is currently generating about 0.04 per unit of risk. If you would invest 407,722 in DB Financial Investment on August 31, 2024 and sell it today you would earn a total of 108,278 from holding DB Financial Investment or generate 26.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
DB Financial Investment vs. Daehan Steel
Performance |
| Timeline |
| DB Financial Investment |
| Daehan Steel |
DB Financial and Daehan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Daehan Steel
The main advantage of trading using opposite DB Financial and Daehan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, Daehan Steel 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 Daehan Steel will offset losses from the drop in Daehan Steel'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 |
| Daehan Steel vs. Woori Technology Investment | Daehan Steel vs. Stic Investments | Daehan Steel vs. Hansol Homedeco Co | Daehan Steel vs. Lotte Chilsung Beverage |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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