Correlation Between DB Financial and KG Eco
Can any of the company-specific risk be diversified away by investing in both DB Financial and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on DB Financial and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and KG Eco.
Diversification Opportunities for DB Financial and KG Eco
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between 016610 and 151860 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of DB Financial i.e., DB Financial and KG Eco go up and down completely randomly.
Pair Corralation between DB Financial and KG Eco
Assuming the 90 days trading horizon DB Financial Investment is expected to under-perform the KG Eco. But the stock apears to be less risky and, when comparing its historical volatility, DB Financial Investment is 2.57 times less risky than KG Eco. The stock trades about -0.16 of its potential returns per unit of risk. The KG Eco Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 517,000 in KG Eco Technology on August 30, 2024 and sell it today you would earn a total of 14,000 from holding KG Eco Technology or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. KG Eco Technology
Performance |
| Timeline |
| DB Financial Investment |
| KG Eco Technology |
DB Financial and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and KG Eco
The main advantage of trading using opposite DB Financial and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco'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 |
| KG Eco vs. KB Financial Group | KG Eco vs. Shinhan Financial Group | KG Eco vs. Hana Financial | KG Eco vs. Woori Financial Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |