Correlation Between DB Financial and MetaLabs
Can any of the company-specific risk be diversified away by investing in both DB Financial and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on DB Financial and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and MetaLabs.
Diversification Opportunities for DB Financial and MetaLabs
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 016610 and MetaLabs is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of DB Financial i.e., DB Financial and MetaLabs go up and down completely randomly.
Pair Corralation between DB Financial and MetaLabs
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.3 times more return on investment than MetaLabs. However, DB Financial Investment is 3.34 times less risky than MetaLabs. It trades about 0.55 of its potential returns per unit of risk. MetaLabs Co is currently generating about 0.06 per unit of risk. If you would invest 519,000 in DB Financial Investment on November 3, 2024 and sell it today you would earn a total of 27,000 from holding DB Financial Investment or generate 5.2% 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. MetaLabs Co
Performance |
| Timeline |
| DB Financial Investment |
| MetaLabs |
DB Financial and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and MetaLabs
The main advantage of trading using opposite DB Financial and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| DB Financial vs. Samyang Foods Co | DB Financial vs. Alton Sports CoLtd | DB Financial vs. INSUN Environmental New | DB Financial vs. Heungkuk Metaltech CoLtd |
| MetaLabs vs. Dongbang Transport Logistics | MetaLabs vs. KMH Hitech Co | MetaLabs vs. Korea Alcohol Industrial | MetaLabs vs. Orbitech Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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