Correlation Between DB Financial and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both DB Financial and PanGen Biotech 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 PanGen Biotech 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 PanGen Biotech, you can compare the effects of market volatilities on DB Financial and PanGen Biotech 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 PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and PanGen Biotech.
Diversification Opportunities for DB Financial and PanGen Biotech
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 016610 and PanGen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech 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 PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of DB Financial i.e., DB Financial and PanGen Biotech go up and down completely randomly.
Pair Corralation between DB Financial and PanGen Biotech
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.43 times more return on investment than PanGen Biotech. However, DB Financial Investment is 2.31 times less risky than PanGen Biotech. It trades about 0.12 of its potential returns per unit of risk. PanGen Biotech is currently generating about -0.16 per unit of risk. If you would invest 503,000 in DB Financial Investment on September 13, 2024 and sell it today you would earn a total of 25,000 from holding DB Financial Investment or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DB Financial Investment vs. PanGen Biotech
Performance |
| Timeline |
| DB Financial Investment |
| PanGen Biotech |
DB Financial and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and PanGen Biotech
The main advantage of trading using opposite DB Financial and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, PanGen Biotech 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 PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
| PanGen Biotech vs. Samhyun Steel Co | PanGen Biotech vs. Samsung Life Insurance | PanGen Biotech vs. Jeil Steel Mfg | PanGen Biotech vs. Innowireless 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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