Correlation Between DB Financial and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both DB Financial and ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor Co, you can compare the effects of market volatilities on DB Financial and ABOV Semiconductor 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 ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and ABOV Semiconductor.
Diversification Opportunities for DB Financial and ABOV Semiconductor
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 016610 and ABOV is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor 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 ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of DB Financial i.e., DB Financial and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between DB Financial and ABOV Semiconductor
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.48 times more return on investment than ABOV Semiconductor. However, DB Financial Investment is 2.07 times less risky than ABOV Semiconductor. It trades about -0.16 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.3 per unit of risk. If you would invest 538,000 in DB Financial Investment on August 30, 2024 and sell it today you would lose (26,000) from holding DB Financial Investment or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DB Financial Investment vs. ABOV Semiconductor Co
Performance |
| Timeline |
| DB Financial Investment |
| ABOV Semiconductor |
DB Financial and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and ABOV Semiconductor
The main advantage of trading using opposite DB Financial and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| DB Financial vs. Hannong Chemicals | DB Financial vs. Tway Air Co | DB Financial vs. Haitai Confectionery Foods | DB Financial vs. Innowireless Co |
| ABOV Semiconductor vs. Dongbang Ship Machinery | ABOV Semiconductor vs. HJ ShipBuilding Construction | ABOV Semiconductor vs. Hanmi Semiconductor Co | ABOV Semiconductor vs. Tuksu Engineering ConstructionLtd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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