Correlation Between DB Financial and SV Investment
Can any of the company-specific risk be diversified away by investing in both DB Financial and SV Investment 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 SV Investment 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 SV Investment, you can compare the effects of market volatilities on DB Financial and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and SV Investment.
Diversification Opportunities for DB Financial and SV Investment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 016610 and 289080 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of DB Financial i.e., DB Financial and SV Investment go up and down completely randomly.
Pair Corralation between DB Financial and SV Investment
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.63 times more return on investment than SV Investment. However, DB Financial Investment is 1.58 times less risky than SV Investment. It trades about -0.15 of its potential returns per unit of risk. SV Investment is currently generating about -0.25 per unit of risk. If you would invest 535,000 in DB Financial Investment on August 25, 2024 and sell it today you would lose (25,000) from holding DB Financial Investment or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. SV Investment
Performance |
| Timeline |
| DB Financial Investment |
| SV Investment |
DB Financial and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and SV Investment
The main advantage of trading using opposite DB Financial and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| DB Financial vs. PH Tech Co | DB Financial vs. BGF Retail Co | DB Financial vs. Korea Air Svc | DB Financial vs. SS TECH |
| SV Investment vs. Aprogen Healthcare Games | SV Investment vs. SM Entertainment Co | SV Investment vs. KIWI Media Group | SV Investment vs. Digital Multimedia Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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